Equifax Shows the Ups and Downs of Commercial Credit Trends

Business Failures on the Rise, Small Business Bankruptcies on the Decline.

Today's Economy: Understanding the Commercial Impact.


When it comes to commercial credit trends, the story has two plots. According to an Equifax study on Q4 2009 data, there were both improvements and setbacks on the commercial bankruptcy, business failure and delinquency fronts. While Equifax analysis showed an average 15% decline in commercial bankruptcies for the second half of 2009, there was a 14% increase in the number of bankruptcies reported during Q4 2009 compared to the same period in 2008. Will this mixed trend continue or is it an anomaly? Further complicating the story are factors such as rising delinquencies and business failures, which continue to impact the commercial markets especially in the Pacific and Mountain regions.


Despite rising business failures and account delinquencies, the commercial landscape has revealed some surprises such as a double digit decline in small business bankruptcies during the second half of 2009," said Dr. Reza Barazesh, senior vice president, Commercial Information Solutions, Equifax. "While these trends send mixed economic signals, it is clear that small businesses remain in a fragile state trying to navigate strong market pressures. How long this trend will continue is the question.

To analyze the market's effect on today's businesses, Equifax examined key credit trends within the portfolios of top national and regional financial institutions, which extend about 75% of all commercial credit. While there were some mixed signals, it is unknown if these trends will sustain themselves in 2010. Equifax will continue to closely monitor commercial economic conditions to assess where the market is trending and report regularly on its findings. Stay tuned.

To view this report as a pdf file, visit: http://www.equifax.com/PR/pdfs/CommercialFactSheetFN3810.pdf



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