Massachusetts Small Business Defaults Up in May, as is Borrowing

Chicago, IL, July 28, 2017 (Newswire.com) - A greater number of small businesses defaulted on existing loans in Massachusetts and the level of borrowing activity increased in May 2017, data reported by PayNet show. The data suggest that financial conditions in the state may weaken.

The PayNet Small Business Default Index (SBDFI) for Massachusetts registered at 1.37% following a 15 basis point rise from April. Massachusetts' SBDFI was 50 basis points under the national SBDFI level of 1.87%. The consistently unfavorable trend in default rates over the past year signals heightened financial stress in the state. Over the last year, both the Massachusetts and national SBDFI rose 19 basis points.

The three industries with the highest default rate in Massachusetts were Public Administration (2.88%); Information (2.39%); and Manufacturing (2.28%). With a 2.15% variance, Public Administration has also seen the greatest increase compared to the previous year of any industry in Massachusetts.

The PayNet Small Business Lending Index (SBLI) for Massachusetts was 103.8, improving 1.3% from the previous month's level and 5.6% above the national SBLI level of 98.3 this month. The Index is basically unchanged from a year ago.

"Expansion has been stagnant over the past year, but conditions may have turned around with the recent increase in lending activity despite the continued high default," asserts the president of PayNet, William Phelan.  

Source: www.paynet.com