Fintech
Ocrolus Finds U.S. Small Businesses Are Cash-Rich And Applying For Credit At Higher Rates Than Pre-Pandemic
Ocrolus, the automation solution that helps financial services companies make high-quality decisions with trusted data and unparalleled efficiency, published the quarterly update to the Ocrolus Small Business Health Index (SBHI). This index offers analysis and insights on the current financial health of small businesses across the United States and economic recovery amidst the ongoing pandemic. The index provides quarterly updates on the current level of financial security for small businesses, including factors such as lending trends, cash balances, and credit quality for the sector. Beyond this, the index also offers a look at the impact of the changing U.S. workforce and Americans’ saving habits during the pandemic and its successive waves.
Top Ocrolus SBHI findings include:
- Small business credit application volume has increased by 28% over the last two years from December 2019 to December 2021.
- Across Ocrolus customers, which span many different industries, small businesses are sitting on average daily balances almost 80% greater than 2019 levels at the time of application for new credit.
- Furniture manufacturing, amusement, and gambling & recreation have been among the top performing small business sectors in recent months, driven in large part by robust job growth.
- Geographically, Texas and Arizona have joined Utah and Idaho as the only U.S. states that have recovered all the jobs they lost at the start of the pandemic. This rebound, driven by population growth, relaxed Covid-19 restrictions, and outsized payroll growth, has led to high index scores in the major cities of those areas while cities in California and the Northeast lag behind and have yet to match their index scores pre-pandemic.
“Based on Ocrolus data and other economic factors, we are seeing small business credit application activity now exceeding pre-pandemic levels, though the results vary substantially by geography and sector,” said David Snitkof, Vice President of Analytics, Ocrolus. “Furthermore, we are also seeing business applicants with greater cash on hand, which could suggest that they are thriving, or alternatively, that they are being more cautious. It is also possible that in a time of volatility and uncertainty, lenders are targeting borrowers with the strongest financial profiles.”
The Ocrolus Small Business Health Index offers a real-time snapshot of the state of small business activity in the U.S. More substantially, it provides a window into the resilience and prospect for recovery for millions of businesses by aggregating a combination of highly relevant external data with proprietary Ocrolus insights. To view the full index, visit https://www.ocrolus.com/blog/small-business-health-index-q1-2022/.