Small Business Defaults in Michigan on the Rise in January
Chicago, IL, March 13, 2017 (Newswire.com) - PayNet, the leading provider of credit ratings on small businesses, reports that in January 2017 a greater number of small firms defaulted on loans in Michigan, with default rates in 11 of the 18 major industries rising in the state.
Despite a 6 basis point increase from December, Michigan's 1.40% PayNet Small Business Default Index (SBDFI) was still 44 basis points below the national SBDFI level of 1.84%. The uptick in defaults over the past two months may signal deteriorating financial health in the state. Year-over-year, the national SBDFI increased 29 basis points, while Michigan's SBDFI rose 10.
The industries with the worst default Index in Michigan were Mining, Quarrying, and Oil and Gas Extraction (5.09%); Transportation and Warehousing (3.92%); and Accommodation and Food Services (2.16%). Nationally, Mining, Quarrying, and Oil and Gas Extraction had a default rate of 4.49%, with a difference of +2.13% compared to the prior year variance of +3.59% in Michigan.
At 109.3, Michigan's PayNet Small Business Lending Index (SBLI) rose 0.9% from the previous month's state level and was 10.2% above the national SBLI level this month. The index is basically unchanged from a year ago.
"With minimal improvement in borrowing and higher defaults, small business financial health remains questionable," explains William Phelan, president of PayNet.