Small and medium-sized business borrowers in the United States showed signs of continued stress in February as the percentage of loans in default stayed at a two-year high, PayNet Inc reported on Thursday. Accounts behind 180 days or more, and unlikely ever to be paid, remained at 0.90 percent of lenders' portfolios in February, unchanged from the 25-month high they reached in January, according to PayNet, which provides risk management tools to the commercial lending industry.
Accounts in moderate delinquency, or those behind by 30 days or more, rose in February to 4.41 percent from 4.37 percent in January, according to PayNet. The only glimmer of hope in PayNet's monthly report was with accounts 90 days or more behind in payment, or in severe delinquency, which improved modestly in February, slipping to 1.36 percent from 1.38 percent in January. It was the seventh consecutive monthly improvement in the measurement.
Bill Phelan, president and founder of Skokie, Illinois-based PayNet, said the drop indicated that lenders remain reluctant to extend credit to small and medium-sized businesses. PayNet collects real-time loan information from more than 227 leading US lenders. The company's proprietary database, which is updated weekly, encompasses more than 16.5 million current and historic contracts worth $740 billion.
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