Delinquency rates dropping among small businesses

Small businesses have largely led the rapid move toward alternative financial services in recent years, as traditional lending avenues continue to take up smaller percentages of overall loan disbursement volumes. Additionally, credit risk managers that deal with smaller firms should have cause for optimism, as recent reports have revealed that these companies are making good on their debts. Reuters recently reported that the latest Thomson Reuters/PayNet Small Business Lending Index logged improvements in loan disbursement volumes, as well as decreases in all types of delinquencies. According to the news provider, accounts delinquent for 30 days or fewer dropped to 1.2 percent in October from 1.21 percent the month prior. The source asserted that this is close to record low levels, and the reading is substantially lower than what is considered to be normal, boding well for the overall economy. Additionally, accounts in default, or those behind by 180 days or more, dropped from 0.32 percent in September to 0.29 percent in October. Debt collectors and credit risk managers should consider these decreases in delinquent accounts, as they indicate improving financial performances among the nation's small businesses.