Iowa Small Business Defaults Down in December, Borrowing Up
Des Moines, Iowa, February 28, 2018 (Newswire.com) - The percentage of small firms defaulting on loans has fallen in Iowa and the level of borrowing activity improved in December 2017, data published by PayNet illustrate. The indices suggest that financial conditions in the state may improve.
PayNet’s Small Business Default Index (SBDFI) for Iowa registered at 1.40% following a 5 basis point improvement from November. Compared to the national SBDFI level of 1.83%, Iowa's SBDFI was 43 basis points less. Financial health is weaker than a year ago in the state despite the recent downturn in defaults. Year-over-year, Iowa's SBDFI increased 4 basis points, while the national SBDFI has remained consistent.
Transportation and Warehousing (2.93%); Construction (2.47%); and Accommodation and Food Services (2.36%) registered the highest default rates of all industries in Iowa. Nationally, Transportation and Warehousing had a default rate of 4.00%, with a difference of --0.20% compared to the prior year, while Iowa had a variance of -0.80%.
Registering at 93.5, the PayNet Small Business Lending Index (SBLI) for Iowa rose 2.5% from the previous month's state level, but was 6.8% lower than the national SBLI level of 100.3 this month. The Index is basically unchanged from a year ago.
"Lower default rates combined with increased borrowing signals a more positive view of economic prospects," states William Phelan, president of PayNet.