Massachusetts Small Business Defaults Up in June, as is Borrowing
Chicago, IL, August 9, 2017 (Newswire.com) - A greater number of Massachusetts' small businesses defaulted on existing loans and the level of borrowing activity increased in June 2017, data released by PayNet illustrate. The indices suggest that financial conditions in the state may weaken.
The PayNet Small Business Default Index (SBDFI) for Massachusetts was 1.36% following a 7 basis point increase from May. Compared to the national SBDFI level of 1.86%, Massachusetts' SBDFI was 50 basis points less. The consistently unfavorable trend in default rates over the past year signals heightened financial stress in the state. Over the last year, Massachusetts' SBDFI increased 23 basis points, while the national SBDFI rose 16 basis points.
Public Administration (2.62%); Manufacturing (2.43%); and Information (2.28%) exhibited the highest default rates of all industries in Massachusetts. With a 1.95% variance, Public Administration has also had the greatest year-over-year increase of any of Massachusetts's industries.
Registering at 105.3, Massachusetts' PayNet Small Business Lending Index (SBLI) increased 1.0% from the previous month's state level and was 6.7% above this month's national SBLI level (98.7). Small business borrowers are cautiously increasing investment.
"Higher defaults are accompanying more investment, leading to higher GDP, more jobs, and more tax-paying," explains the president of PayNet, William Phelan.