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- There are surprising differences in credit quality between businesses of different size. \u00a0Solos\u2014sole proprietorships, self-employed and other businesses without employees have the lowest default rate. Ignored from most statistics because of their less than four percent share of total business receipts, they directly impact the lives of over 20 million people and generate nearly a trillion dollars in receipts.<\/li>\n
- E100\u2014businesses employing fewer than 100 and more than 20 have the highest default rate. They are a diverse group, squeezed in the middle, financially independent of the owner\/operator, informationally opaque, and too small for special attention by the financial markets.<\/li>\n
- E20\u2019s are the credit quality gems. Employing fewer than 20, they are the true small businesses and largely underserved by the credit markets.<\/li>\n
- E100+ businesses account for the bulk of business employment and receipts and garner the most attention. As a group, their default rate is similar to that of their smaller counterparts\u2014E20\u2019s.<\/li>\n
- There are opportunities\u00a0for better serving the credit needs of businesses.<\/li>\n
- E20 businesses represent an attractive segment for alternative lenders.<\/li>\n
- Solos deserve another look. Lenders\u2019 traditional approaches might be shutting out a potentially vibrant, growing and profitable segment of borrowers.<\/li>\n
![\"Small](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/09\/Small-Business-Loans-300x218.jpg\")
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From their lows of 2006, business defaults peaked in 2008 followed by a three-year period of considerable improvement. They have continued to improve since then and are now at their lowest levels in ten years broadly mirroring the Federal … Continue reading