Small Business Lending Increased in December 2024

THE EQUIFAX DECEMBER SMALL BUSINESS LENDING INDEX (SBLI) showed that nominal small business lending increased by 1.5% month-over-month and 7% year-over-year. The SBLI three-month moving average increased month-over-month by 3.2% and held steady year-over-year.

Meanwhile, the Equifax Small Business Delinquency Index (SBDI) 31-90 Days Past Due decreased slightly to 1.73% in December 2024, down five basis point month-over-month and down one basis point from December 2023. The SBDI 91–180 Days Past Due decreased one basis point from November to December 2024, from 0.70% to 0.69%. The Small Business Default Index also decreased slightly to 3.37%, down five basis points month-over-month. 

According to the latest report, the Equifax SBLI suggests that small business lending activity improved in December (+1.5% M/M; +7.0% Y/Y). Meanwhile, small business financial stress could be easing: both short-term delinquencies (31-90 days past due) and defaults have fallen for three consecutive months and appear to have passed inflection points, while long-term delinquencies (91-180 days past due) have plateaued. Evidence suggests the U.S. economy appears to be on track thus far in 2025, and the most recent employment report suggests the labor market is in good standing. However, there may be an unusually high degree of policy uncertainty that could impact the economy’s near-term trajectory, including heightened consumer anxiety and the risk of inflation reigniting.

Regional Analysis
 

Small Business Lending:

In December, 32 states had a year-over-year decrease in 12-month rolling lending volumes. Of the ten largest states, six showed a decrease from 2023. Georgia and California both decreased 10%, Texas decreased 5%, and Florida dropped 5% as well. Illinois showed 6% growth from last year while Ohio grew 4%. Of all states, South Carolina (+17%) and Iowa (+12%) had some of the highest growth numbers over last year. Nevada (-17%) and Wyoming (-16%) posted some of the largest decreases from December 2023.

Month-over-month, nominal lending activity was up in 39 states in the preceding 12 months, including seven of the ten largest states. California had the largest decrease (-1.5%)  of these ten in the 12-month period ended in December 2024 as compared to the 12-month period ended in December 2023. 

Small Business Delinquency and Default:

Defaults increased in 48 states annually and in seven states month-over-month. Year-over-year, Georgia improved nearly 10%, while Minnesota had the largest default rate increase, jumping 53%. Florida (4.5%), Texas (4.2%) and Hawaii (4.1%) had the highest overall default rates amongst all states. North Dakota (2.0%) and South Dakota (2.4%) had the lowest. Of all states, Maine increased the most from last month at +4%. Of the ten largest states, only one increased default rates over last month (Pennsylvania ticked up 4%). New York improved from last month by 4.3%, while Illinois improved by 3.7%.

In 31-90 day delinquency, 28 states had an increase in delinquency month-over-month. Delinquency metrics remain elevated but turning the corner and improving, with only 22 states increasing their delinquency rates from last year (including just three of the 10 largest states). Florida (3.0%), Georgia (2.7%) and New Mexico (2.6%) have the highest delinquency rates in December 2024, while South Dakota (0.5%) and Ohio (1.1%) have the lowest. Montana showed the largest annual increase in delinquency, rising 94 basis points since last December. Of the ten largest states, New York (12 bps)  and California (seven bps) had the largest year-over-year increases. Florida decreased 18 bps from December 2023, Georgia decreased 16 bps and North Carolina decreased 14 bps.

Industry Analysis

Small Business Lending: 

• In December 2024, nominal small business lending fell in one of the 17 tracked industries month-over-month, holding steady in Manufacturing, Finance and Insurance, Wholesale Trade, as well as Finance and Insurance. 

• 12-month rolling lending activity weakened most month-over-month (-1%) in Other Services (except Public Administration).

• Compared to December 2023, lending rose most in Health Care and Social Assistance (+6%), followed by Arts, Entertainment, and Recreation (+5%). Lending fell in Manufacturing (-10%), Transportation and Warehousing  (-9%) as well as Information (-8%).

Small Business Delinquency and Default:

• In December 2024, the annualized Small Business Default Index rose or held steady month-to-month in seven of the 17 tracked industries, with some of the largest increases in Mining, Quarrying, and Oil and Gas Extraction (15%) and Arts, Entertainment, and Recreation (4%).

• On an annual basis, from December 2023 to December 2024, the Small Business Default Index increased in 15 of the 17 tracked industries, led by Mining, Quarrying, and Oil and Gas Extraction (+64%). 

• Other large increases include Wholesale Trade (+36%) and Arts, Entertainment, and Recreation (+35%).  

• On an annual basis, the 31-90 day SBDI rose in two industries vs. December 2023. Construction rose 9% while Retail rose 5%. Agriculture (-14%), Transportation (-9%), Health Care (-5%) and General (-2%) all showed improvement from last year. 

Produced monthly, the Small Business Indices help lenders and businesses track changes in the small business marketplace by providing insights into lending, default, and delinquency trends. To learn more and view the latest reports, check out our Small Business Indices page.