Press Release (ePRNews.com) - Chicago, IL - Feb 28, 2018 - The percentage of small firms defaulting on loans has improved in Minnesota and the level of borrowing activity improved in December 2017, data released by PayNet illustrate. The indices suggest that financial conditions in the state may improve.
The PayNet Small Business Default Index (SBDFI) for Minnesota was best nationally at only 1.02% following a 5 basis point reduction from November. Compared to the national SBDFI level of 1.83%, Minnesota’s SBDFI was 81 basis points less. The decrease in defaults over the past two months may signal improving financial health in the state. The national SBDFI has remained unchanged year-over-year, whereas Minnesota’s SBDFI dipped 18 basis points.
Transportation and Warehousing (2.55%); Accommodation and Food Services (1.66%); and Finance and Insurance (1.62%) registered the highest default rates of all industries in Minnesota. Nationally, Transportation and Warehousing had a default rate of 4.00%, with a difference of –0.20% compared to the prior year, while Minnesota had a variance of -1.42%.
At 81.3, Minnesota’s PayNet Small Business Lending Index (SBLI) ranked 48th in the country and was below the national SBLI by 19.0%. However, the state did progress 1.1% from its previous month. Year-over-year, business investment deteriorated 3.1%.
“The performance of defaults over the past 3 months may foster a better lending environment,” asserts William Phelan, president of PayNet.