Quarterly Business Credit
Review for Q3 2013
December 10th, 2013

©2013 Experian Information Solutions, Inc. All rights re...
Welcome

 Have questions?
►

We encourage you to submit your
questions for the panel throughout
today’s webinar

 Phones...
Our Speakers

Joel Pruis
Sr. Business Consultant
Experian Global Consulting Practice
•
•
•

Senior Business Consultant ded...
Our Speakers

Nate Kelley
Associate Economist
Moody’s Analytics
•
•
•
•

Covers regional economies
Researches and writes e...
Quarterly Business Credit
Review

Presented by Joel Pruis

©2013 Experian Information Solutions, Inc. All rights reserved....
Small Business Credit Index

©2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.

6
Delinquency Rate Hits New Low

13.0

15
Outstanding credit, %
change yr ago (L)

10

12.5
12.0

5

11.5

0

11.0
10.5

-5
...
National Perspective
Experian Metro Business Pulse

Q2 2013
Delinquency
Days Beyond Terms
Bankruptcy Rate

Q3 2013

Change...
Performance by Industry
Ranked by Delinquency %

Industry

Delinquency

Days Beyond
Terms

Bankruptcy Rate

Top
Health Ser...
Delinquency Rate, $ volume

1.1% to 4.4%
4.5% to 15.6%
15.7% to 25.1%
U.S.=10%

©2013 Experian Information Solutions, Inc....
High Delinquency Across Industries in Florida
Delinquency rate, $ volume

Agriculture
Business services
Health services
Re...
Top/Bottom 10 - Delinquency

Salt Lake City, UT
Houston, TX
Boise City, ID
Tucson, AZ
San Diego, CA
Phoenix, AZ
Baton Roug...
Top/Bottom 10 – Days Beyond Terms

San Francisco, CA
Omaha, NE
New York, NY
Seattle, WA
Milwaukee, WI
Minneapolis, MN
Salt...
Top/Bottom 10 – Bankruptcy Rate

New York, NY
Nassau-Suffolk, NY
Baton Rouge, LA
Honolulu, HI
Miami, FL
New Orleans, LA
No...
What about that Bankruptcy Rate?

 Still low in the East
 Still higher in the West
 Overall Bankruptcy Rate continues t...
Most Improved Award by Category

Industry
Delinquency
Days Beyond Terms
Bankruptcy Rate

Real Estate

12.69%

-1.48%

Comm...
“Greatest Opportunity for Improvement” by
Category

Industry
Delinquency
Days Beyond Terms
Bankruptcy Rate

Hospitality

9...
Key Take-Away’s:

 Key take away
►

Keep watching the Bankruptcy
rate

►

Retail performance?

►

Growth is available

►
...
Macro Outlook: The Right
Pieces Are Falling Into Place

Nathan Kelley
Moody’s Analytics

©2013 Experian Information Soluti...
Fiscal Headwinds Are Set to Fade…
Contribution to real GDP growth, %
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6

Private economy
Fiscal...
Housing Will Provide the Catalyst…
Vacant homes for sale, for rent and held off market, ths
11,500
10,500
9,500
8,500
Tren...
…Pushing Housing Starts Upward…
Single-family and multifamily starts, mil
2.25
2.00
Trend

1.75
1.50
1.25
1.00
0.75
0.50

...
…Meaning More Homebuilding and Jobs
Millions of jobs
9,500

130,000

Housing-Related (L)

9,000

Non Housing-Related (R )
...
Home Prices Will Appreciate Fastest in the West…
Case-Shiller Index, average annual growth, %, 2013-2016

U.S. = 5.9

≥7.1...
A Bumbling Congress Hurts Confidence

100
90

Debt Ceiling Debate

80

S&P Downgrade

70
60
50
40
Confidence, 3 mo MA (L)
...
The Shutdown’s Impact

Nathan Kelley
Moody’s Analytics

©2013 Experian Information Solutions, Inc. All rights reserved.
Ex...
Federal Impasse Severely Rattles Psyches
Moody’s Analytics policy uncertainty index, 4-wk MA, 2004-2005=0
160

Shutdown/de...
U.S. Small Firms Shaken by the Shutdown
NFIB small business optimism index, 1986=100
5

95

0

94

-5

93

-10

92

-15

9...
Gap Closing for Small-Business Loan Volumes
Approved SBA 7(a) and 504 loans, ytd $ vol, % change yr ago
-10
-15
-20
-25
-3...
But Credit Supply Doesn’t Seem to Be the Issue
% of small firms who say…
43

58
Credit is “hard
to get” (R)

41
39

57
56
...
HOT TOPIC:
SHUT DOWN
CONSEQUENCES

©2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.

©2013...
What may we see in the 4th quarter?

 Impact on Retail?
 Employment outlook?
 ACA impact?

©2013 Experian Information S...
QUESTIONS

©2013 Experian Information Solutions, Inc. All rights reserved.
Experian Public.

©2013 Experian Information So...
Wrapping Up

 Please join our special Q&A Hangout
DECEMBER 12th 11:00 a.m. (PST)
►

►

►

Announce the winners of the Kin...
Essential insight serving global financial markets
www.moodysanalytics.com

©2012
©2013 Experian Information Solutions, In...
www.experian.com/b2b

www.experian.com/b2b

©2012
©2013 Experian Information Solutions, Inc. All rights reserved.
Experian...
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Quarterly Business Credit Review (Q3 2013)

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In this presentation Joel Pruis of Experian's Global Consulting Practice and Nate Kelley of Moody's Analytics take us through key findings from the Experian/Moody's Analytics Q3 Small Business Credit Index, and macro outlook of small business credit.

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Quarterly Business Credit Review (Q3 2013)

  1. 1. Quarterly Business Credit Review for Q3 2013 December 10th, 2013 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. 1
  2. 2. Welcome  Have questions? ► We encourage you to submit your questions for the panel throughout today’s webinar  Phones Muted – This ensures optimal audio quality.  Technical Issues – please type your questions into the chat box on the left side of the console. Follow Us on Twitter: “twitter.com/experian_b2b” ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 2
  3. 3. Our Speakers Joel Pruis Sr. Business Consultant Experian Global Consulting Practice • • • Senior Business Consultant dedicated to delivering programs to his clients that increase productivity and profitability, provide financial services organizations with tools to gain a competitive edge. More than 22 years of experience in origination and portfolio management for small business and commercial credit Bachelors in Accounting, MBA from Indiana Wesleyan University ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 3
  4. 4. Our Speakers Nate Kelley Associate Economist Moody’s Analytics • • • • Covers regional economies Researches and writes extensively on macro topics, including labor, consumer, and smallbusiness economics. Former municipal bond trader at The Reserve Management Corporation in New York City. Bachelor’s degree from Baruch College of the City University of New York ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 4
  5. 5. Quarterly Business Credit Review Presented by Joel Pruis ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. 5
  6. 6. Small Business Credit Index ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 6
  7. 7. Delinquency Rate Hits New Low 13.0 15 Outstanding credit, % change yr ago (L) 10 12.5 12.0 5 11.5 0 11.0 10.5 -5 Delinquency rate, % (R) -10 11 12 10.0 9.5 13 Sources: Experian, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 7
  8. 8. National Perspective Experian Metro Business Pulse Q2 2013 Delinquency Days Beyond Terms Bankruptcy Rate Q3 2013 Change 13.43% 5.71 0.99% 12.89% 5.62 0.95% -0.53% -0.09 days -0.04% Fewer and Faster – Just the way we like it! Source: Experian Metro Business Pulse – Average Metropolitan Data ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 8
  9. 9. Performance by Industry Ranked by Delinquency % Industry Delinquency Days Beyond Terms Bankruptcy Rate Top Health Services 8.05% 3.93 0.68% Hospitality 9.52% 5.28 1.51% Education Services 11.40% 4.33 0.64% Agriculture 11.56% 7.12 1.42% Legal Services 12.54% 6.06 0.44% Bottom Manufacturing 15.56% 6.45 1.86% Transportation 18.83% 8.14 1.93% Finance 19.08% 9.88 1.34% Communications 19.79% 7.81 1.50% Construction 22.64% 12.18 2.35% Source: Experian Metro Business Pulse ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 10
  10. 10. Delinquency Rate, $ volume 1.1% to 4.4% 4.5% to 15.6% 15.7% to 25.1% U.S.=10% ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 11
  11. 11. High Delinquency Across Industries in Florida Delinquency rate, $ volume Agriculture Business services Health services Real estate Utah Idaho Florida Wholesale trade 0 10 20 30 Sources: Experian, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 12
  12. 12. Top/Bottom 10 - Delinquency Salt Lake City, UT Houston, TX Boise City, ID Tucson, AZ San Diego, CA Phoenix, AZ Baton Rouge, LA San Francisco, CA Las Vegas, NV Fresno, CA 0.95% - 5.02% West Palm Beach, FL Baltimore, MD Philadelphia, PA Jacksonville, FL Atlanta, GA Memphis, TN Fort Lauderdale, FL Orlando, FL Cincinnati, OH Miami, FL 20.19% - 30.77% Source: Experian Metro Business Pulse ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 13
  13. 13. Top/Bottom 10 – Days Beyond Terms San Francisco, CA Omaha, NE New York, NY Seattle, WA Milwaukee, WI Minneapolis, MN Salt Lake City, UT Rochester, NY Oklahoma City, OK Portland, OR 3.19 - 3.99 West Palm Beach, FL Sarasota, FL Chicago, IL Atlanta, GA Jacksonville, FL Tampa, FL Fort Lauderdale, FL Miami, FL Las Vegas, NV Orlando, FL 14.08 - 7.83 Source: Experian Metro Business Pulse ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 14
  14. 14. Top/Bottom 10 – Bankruptcy Rate New York, NY Nassau-Suffolk, NY Baton Rouge, LA Honolulu, HI Miami, FL New Orleans, LA Norfolk-Virginia Beach, VA Fort Lauderdale, FL Richmond-Petersburg, VA Washington, DC 0.27% - 0.56% Portland, OR Albuquerque, NM Rochester, NY Tacoma, WA Santa Rosa, CA Denver, CO Colorado Springs, CO San Bernardino, CA Bakersfield, CA Sacramento, CA 1.49% - 2.34% Source: Experian Metro Business Pulse ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 15
  15. 15. What about that Bankruptcy Rate?  Still low in the East  Still higher in the West  Overall Bankruptcy Rate continues to slightly decline across the country  Overall Delinquency is improving in the East ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 16
  16. 16. Most Improved Award by Category Industry Delinquency Days Beyond Terms Bankruptcy Rate Real Estate 12.69% -1.48% Communications 7.81 -0.38 Transportation Business Services 1.93% 1.33% -0.16% Miami, FL 30.77% -13.95% Chicago, IL 8.19 -0.11 San Antonio, TX 1.39% -0.16% Geography Delinquency Days Beyond Terms Bankruptcy Rate ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 17
  17. 17. “Greatest Opportunity for Improvement” by Category Industry Delinquency Days Beyond Terms Bankruptcy Rate Hospitality 9.52% 0.44% Construction 12.18 0.24 Finance 1.34% 0.05% Cincinnati, OH 29.43% 3.85% Jacksonville, FL 8.34 0.60 Baltimore, MD 0.58% 0.03% Geography Delinquency Days Beyond Terms Bankruptcy Rate ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 18
  18. 18. Key Take-Away’s:  Key take away ► Keep watching the Bankruptcy rate ► Retail performance? ► Growth is available ► Watch for seasoning of the new credit balances ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 19
  19. 19. Macro Outlook: The Right Pieces Are Falling Into Place Nathan Kelley Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. 21
  20. 20. Fiscal Headwinds Are Set to Fade… Contribution to real GDP growth, % 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 Private economy Fiscal policy Total 05 06 07 08 09 10 11 12 13F 14F 15F Source: Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 22
  21. 21. Housing Will Provide the Catalyst… Vacant homes for sale, for rent and held off market, ths 11,500 10,500 9,500 8,500 Trend Vacancy 7,500 6,500 5,500 90 92 94 96 98 00 02 04 06 08 10 12 Sources: Census, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 23
  22. 22. …Pushing Housing Starts Upward… Single-family and multifamily starts, mil 2.25 2.00 Trend 1.75 1.50 1.25 1.00 0.75 0.50 02 03 04 05 06 07 08 09 10 11 12 13 14 15 Sources: Census, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 24
  23. 23. …Meaning More Homebuilding and Jobs Millions of jobs 9,500 130,000 Housing-Related (L) 9,000 Non Housing-Related (R ) 128,000 8,500 8,000 126,000 7,500 7,000 124,000 6,500 122,000 6,000 05 06 07 08 09 10 11 12 13 Source: Wall Street Journal, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 25
  24. 24. Home Prices Will Appreciate Fastest in the West… Case-Shiller Index, average annual growth, %, 2013-2016 U.S. = 5.9 ≥7.1 5.1 to 7 3.1 to 5 ≤3.0 Sources: CoreLogic, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 26
  25. 25. A Bumbling Congress Hurts Confidence 100 90 Debt Ceiling Debate 80 S&P Downgrade 70 60 50 40 Confidence, 3 mo MA (L) Real spending, % chg yr ago (R) 30 20 08 09 10 11 12 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 13 Sources: BEA, Conference Board and Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 27
  26. 26. The Shutdown’s Impact Nathan Kelley Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. 28
  27. 27. Federal Impasse Severely Rattles Psyches Moody’s Analytics policy uncertainty index, 4-wk MA, 2004-2005=0 160 Shutdown/debt ceiling standoff Lehman collapse 140 120 100 80 60 40 20 0 08 09 10 11 12 13 Source: Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 29
  28. 28. U.S. Small Firms Shaken by the Shutdown NFIB small business optimism index, 1986=100 5 95 0 94 -5 93 -10 92 -15 91 -20 90 -25 Net % expecting economy to improve (L) Composite index (R) -30 -35 -40 12 89 88 87 13 Sources: NFIB, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 30
  29. 29. Gap Closing for Small-Business Loan Volumes Approved SBA 7(a) and 504 loans, ytd $ vol, % change yr ago -10 -15 -20 -25 -30 -35 -40 -45 -50 -55 -60 Oct 18 Oct 25 Oct 31 Nov 8 Nov 15 Nov 22 Sources: U.S. Small Business Administration: Weekly lending report, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 31
  30. 30. But Credit Supply Doesn’t Seem to Be the Issue % of small firms who say… 43 58 Credit is “hard to get” (R) 41 39 57 56 37 55 35 54 33 53 31 29 52 Borrowing at least once per qtr (L) 51 27 05 06 07 08 09 10 11 12 13 Sources: NFIB Small Business Optimism Survey, Moody’s Analytics ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 32
  31. 31. HOT TOPIC: SHUT DOWN CONSEQUENCES ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. 33
  32. 32. What may we see in the 4th quarter?  Impact on Retail?  Employment outlook?  ACA impact? ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 34
  33. 33. QUESTIONS ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. ©2013 Experian Information Solutions, Inc. All rights reserved. Experian and the marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the trademarks of their respective owners. No part of this copyrighted work may be reproduced, modified, or distributed in any form or manner without the prior written permission of Experian. Experian Public. 37
  34. 34. Wrapping Up  Please join our special Q&A Hangout DECEMBER 12th 11:00 a.m. (PST) ► ► ► Announce the winners of the Kindle Fire readers Today’s attendees will all receive invitation We will be posting a recording of webinar to our web site www.experian.com/b2b https://plus.google.com Circle Us on Google Plus: “Experian Business Information Services” ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 38
  35. 35. Essential insight serving global financial markets www.moodysanalytics.com ©2012 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 39
  36. 36. www.experian.com/b2b www.experian.com/b2b ©2012 ©2013 Experian Information Solutions, Inc. All rights reserved. Experian Public. 40

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