COSTA MESA, Calif. Credit conditions for small businesses in the U.S. continued to improve during Q2, according to the latest Experian/Moody's Analytics Small Business Credit Index.
The index cited gains in personal income, retail sales and employment for the increase by 2.8 points from the previous quarter to a record 111.7. That compares to a baseline of 100 for the first quarter of 2011. Experian and Moody's evaluate conditions at firms with 5 to 99 employees by compiling repayment information from banks and other credit providers, along with macroeconomic data.
"The economy has held up better than anticipated so far this year in the face of large tax increases and government spending cuts, which has supported improved small-business borrowing and credit quality," Moody's chief economist Mark Zandi said in statement. "While there remain several hurdles to even better conditions, including the coming political battles over the Treasury debt ceiling and federal government funding and the prospects for higher interest rates, small businesses should get over these hurdles reasonably well."
As economic conditions brightened this quarter, small businesses paid down more delinquent debt. Among smaller firms of all sizes, 10.2% share of total credit outstanding was delinquent, down 2.4 percentage points from a year earlier the report found.
