Small Business Lending Index (SBLI)

What Is the Small Business Lending Index (SBLI)?

The Small Business Lending Index (SBLI) is an index of business lending that is distributed by PayNet, a subsidiary of Equifax, that is generally viewed as a leading indicator of the economy. It measures the aggregate number of new loans that are made to small businesses in the past 30 days.

The SBLI gives "early signals of future economic growth, demand for capital, and business fixed investment across different sectors of the economy." It is an indicator for future changes in the gross domestic product (GDP).

Understanding the Small Business Lending Index (SBLI)

The Small Business Lending Index (SBLI) uses PayNet's database of loans and rents from the biggest commercial and industrial loan suppliers to measure the volume of small business loans issued throughout recent days.

There were 31.7 million small businesses in the U.S. in 2020, which account for 99.9% of U.S. businesses. Consequently, grasping the activities of small businesses, as well as their prosperity and disappointment, is a key to figuring out the progress of the U.S. economy.

The SBLI measures the loan activity of these small businesses. Loans are utilized for different purposes, for example, for growth, expansion, paying down obligations, and a large group of different requirements. Consequently, the SBLI is an indicator of GDP. As per PayNet, in light of the fact that small businesses are more sensitive to changes in the economy, the SBLI fills in as an indicator of macroeconomic industry trends.

Construction of the Small Business Lending Index (SBLI)

As per PayNet, the index is segmented into 988 indices at the national, state, and industry levels which are formed on a rolling year basis due to the volatility of smaller sample sizes.

The index is distributed month to month in three phases as follows:

• PRELIMINARY: current month data reflecting latest small business lending activity delivered
• Overhauled: data for the month going before Preliminary delivery
• Last: data for the month going before Revised discharge

In its Strategic Insights report, PayNet examines the SBLI index and the experiences that it gives on the economy. It gives knowledge into regional trends as well as industry trends. In talking about regional trends, the section covers loan activity in specific states, ordinarily referring to the 10 biggest states.

The industry section covers 18 industries and talks about the specific ones that have seen the best change in loan origination. Industries included are agriculture, construction, professional services, healthcare, mining, quarrying, and oil and gas.

It likewise gives an economic setting of the entirety of the data, examining economic growth and factors in the economy that might have affected the index. The SBLI is accessible as a standalone graph too that can be separated by state and industry, giving a lot of granular detail.

Small Business Lending Index (SBLI) versus Small Business Delinquency Index (SBDI)

PayNet likewise builds the intently related Small Business Delinquency Index (SBDI), which measures loan delinquencies by 31-90, 91-180, and 30-180 days.

It resembles the Small Business Lending Index (SBLI), yet additionally measures small business financial stress and default risk, gives early alerts of future insolvency, and fills in as a leading indicator of changes in unemployment rates on both the national level and for some U.S. states.

As per PayNet, "it gives knowledge to financial services executives, market analysts, policymakers, and regulators to comprehend the stage of the business cycle and to set credit oversight policies."

Using the two indexes together in analysis can give a strong comprehension of the financial soundness of the economy, where the economy is going in terms of booms or recessions, as well as the specific industries that are performing ineffectively or well.

Features

• The SBLI makes every one of the data accessible on a state-by-state basis as well as by industry, enveloping 18 industries altogether.
• The Small Business Lending Index (SBLI) is an index given by PayNet that measures the number of new loans that are issued to small businesses in the past 30 days.
• The SBLI is viewed as a leading indicator of the economy, especially gross domestic product (GDP), as small businesses respond quicker to changes in the economy than bigger businesses.
• Data for the SBLI is assembled from the biggest commercial and industrial loan lenders in the nation and is accessible consistently.