PayNet Launches Small Business Delinquency Index
PayNet announced the PayNet Small Business Delinquency Index (SBDI), a new economic index that quantifies small business financial stress and default and provides early warning of future insolvency.
Because small businesses generally respond to changes in economic conditions more rapidly than larger businesses do, the PayNet Small Business Delinquency Index predicts future trends in financial stress with a three to six month lead time, PayNet said. Small businesses generally have fewer accumulated resources available to serve as a buffer against lean economic times, and therefore reflect changes in the underlying economy more quickly. The SBDI works to predict financial stress on the national, industry, and state levels for nonperforming loans, industry loan delinquency rates, and states’ municipal bond spreads.
“Small Business Delinquency Index provides leading indications of non-performing loans. Pinpointing rising risks by industry sectors and geographic regions helps regulators and bankers deal with financial problems sooner,” said William Phelan, president of PayNet.
The SBDI is the latest addition to PayNet’s family of indices including the Thomson Reuters/PayNet Small Business Lending Index (SBLI), further transforming data into intelligent information for the small business market.