PayNet, a small business analytics and risk management technology firm, has rolled out a new economic indicator, PayNet Small Business Delinquency Index (SBDI), to offer insight into health of the US economy.
Designed to offer early warning of future insolvency, the new economic index forecasts future trends in financial stress with a three to six month lead time.
Due to lesser buffer resources available against lean economic times, small businesses generally react to changes in economic conditions more quickly than larger businesses.
The SBDI predicts financial stress on the national, industry, and state levels for nonperforming loans, industry loan delinquency rates, and states’ municipal bond spreads.
PayNet president William Phelan said that the SBDI offers leading indications of non-performing loans by further transforming data into intelligent information for the small business market.
"Pinpointing rising risks by industry sectors and geographic regions helps regulators and bankers deal with financial problems sooner," Phelan added.
PayNet caters credit ratings on small businesses and enables lenders to achieve optimal risk management, growth and operational efficiencies.