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

October 13, 2020

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

On Tuesday, October 13, 2020, CBA and Small Business Financial Exchange 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.