Small-business credit outlook remains negative in a poor sales environment
Q2 report findings
Small businesses have turned to borrowing to survive periods of prolonged slumping sales, in many cases from government programs offering loan forgiveness. This increased borrowing has helped to hide rising delinquent balances, but such a solution is a short-term fix. Small businesses will need to find ways to generate revenue to keep their credit current. Defaults will come as forbearance programs will not last forever and customers are likely to change their priorities in the wake of COVID-19.