CBA, SBFE Small Business Data Shows First Full COVID-19 Quarter, PPP Impact

Nick Simpson

CBA, SBFE Small Business Data Shows First Full COVID-19 Quarter, PPP Impact

 

WASHINGTON – The Consumer Bankers Association and Small Business Financial Exchange today released the Small Business Lending Trends report covering the second quarter of 2020. The report, which is released quarterly, examines key credit information for America’s small businesses and shows delinquency peaking for most account types as the COVID-19 pandemic spanned the entirety of its first quarter.  

 

Key findings from the report, which examined data from Q2 2020, include:

 

  • Delinquency peaked in early Q2 2020 for most account types, while charge-off figures increased late Q2, specifically for unsecured account types.

 

  • The data also illustrates possible effects of COVID-19 assistance programs and an influx of dollars as small businesses’ average balances have declined for revolving debt throughout Q2 2020.

 

  • Term loan delinquency has decreased due to an influx of large term loan balances with many Paycheck Protection Program (PPP) being submitted for the first time in Q2 2020. These PPP loans are classified as term loans. Lines of credit and term loans are more likely to be secured by collateral and a business may prioritize payment of these obligations over unsecured products.

 

  • Credit Limits, after consistently increasing from April 2018 to October 2019, leveled off in Q4 2019 and Q1 2020. Balances are at their lowest point as of the end of Q2, potentially a result of an influx of dollars due to COVID-19 assistance programs or the terming out of higher balance accounts. The recent drop in balances lead to declining utilization rate for all account types, reaching an analyzed low in June 2020.

 

  • Excluding Term, account types exhibited increased charge-offs with the most significant uptick for unsecured debt.

 

A full copy of the report is available here.

 

The CBA-SBFE Small Business Lending Trends report offers data on delinquencies, credit utilization and credit utilization by account type, and charge-off rates. In addition to the data, the report offers a brief analysis of each data set.

 

The data used to compile the report includes information collected from SBFE members on small businesses and their payment performance on commercial credit accounts.

 

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About the Consumer Bankers Association:

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.

 

About SBFE:

The Small Business Financial Exchange, Inc. and SBFE, LLC (collectively known as SBFE) is one of the country's leading sources of small business credit information. Established in 2001, the trade association's database houses information on over 38 million businesses and enables information exchange among Members who provide small business financing. By providing industry insight and an aggregated view of small business financial data to its Members, the SBFE model enables innovative risk management solutions through its strategic relationships. SBFE is the only Member-controlled organization of its type and is serving as a trusted advocate for the safe and secure growth of small business. For more information, visit www.sbfe.org.