Due to the profound, far-reaching impact of small business on the U.S. economy, information services company, Experian, teamed with Moody’s Analytics to develop the Experian/Moody’s Analytics Main Street Report.

The new quarterly report benchmarks the overall financial health of small businesses, identifies emerging trends and provides insight into what these trends mean for small businesses and the economy as a whole.

The Q1/16 report shows that credit conditions for small businesses have remained relatively stable, as delinquency and bankruptcy rates hold steady at low levels. In fact, much of the slight decrease in delinquencies was driven by fewer small businesses falling within the 61 to 90 and 91+ days past due categories.

Additionally, the report shows that small businesses have begun to expand their credit lines while keeping their utilization rates down. Through a combination of the increase in credit availability and small gains in balances, the average credit utilization for a small business dropped nearly 17% from the previous year.

“Small businesses have expanded their access to credit, but appear to be holding off on significant investment,” said Gavin Harding, senior business consultant for Experian. “While the sector is stable, owners may be hesitant to invest in their businesses due to volatility in the markets or regional factors such as the uncertainty in the energy sector.”

“Small business credit conditions continue to improve, and near-term prospects are good,” said Mark Zandi, chief economist for Moody’s Analytics. “Delinquencies and bankruptcies have declined in most industries and regions of the country for more than a year. The energy industry is the only exception. There are threats to the positive small business credit outlook, including prospects for rising interest rates and volatile financial markets, but those threats appear modest.”

Other Q1/16 findings:

  • Despite a strong economic performance relative to the rest of the country over the past several years, bankruptcy rates were elevated in the Southwest and the West.
  • Delinquency rates for the retail industry ticked up slightly during Q1/16 as a result of weak retail sales
  • The top three states with the highest average business credit score were Vermont (62.6), North Dakota (61.8) and South Dakota (61.7)