California Small Business Defaults Up in February, Borrowing Down
Chicago, IL, April 13, 2017 (Newswire.com) - Data published by PayNet show that the percentage of small businesses defaulting on existing loans has increased in California and the level of borrowing activity fell in February 2017. The data suggest that economic conditions in the state may substantially weaken.
PayNet’s Small Business Default Index (SBDFI) for California registered at 1.61% following a 3 basis point increase from January. California's SBDFI was 28 basis points under the national SBDFI level of 1.89%. The uptick in defaults over the past two months may signal deteriorating financial health in the state. The national SBDFI rose 30 basis points year-over-year, while California's SBDFI increased 19.
Mining, Quarrying, and Oil and Gas Extraction (4.67%); Transportation and Warehousing (4.13%); and Information (2.83%) displayed the highest default rates of all industries in California. In addition to having the highest mark this month, Mining, Quarrying, and Oil and Gas Extraction has also seen the greatest rise year-over-year of any of California's industries with a variance of +3.37%.
Registering at 97.9, the PayNet Small Business Lending Index (SBLI) for California dropped 1.1% from the previous month's state level and was 1.1% beneath the national SBLI level this month. Small business borrowers are being cautious and holding off on new investment.
"Declining investment and deteriorating financial health exhibited by California's small businesses set the stage for a slowing economy," states William Phelan, president of PayNet.
Source: www.paynet.com
