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Taking the RiskOut of Small
Business Lending
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PayNet and PayNet AbsolutePD are registered trademarks of PayNet, Inc.PayNet AbsolutePD Outlook is a service mark of PayNet, Inc.
C&I’s Gonna Take Time
RMA Chapter Leaders ConferenceJune 23, 2017
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Staying Alive
• C&I Borrowing Soft
• Defaults Rising
• Lending Efficiency via fintech
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REALITY 1: Governing is Hard Work
EPADodd Frank
ACAInfrastructure
Program
Business Tax Rate
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REALITY 2: Good Things Take Time
2012
61-101
2016
103-58
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REALITY 3: Stocks A Bit Ahead of Themselves
S&P 500 +16.9% since the election
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REALITY 4: Private Businesses Remain Cautious
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Patience is the Word
If solid measures can be enacted to…
Private Businesses are Positive……But they Doubt Policies will Change Quickly
…They are realists About Cash Flow…Banks Focus on Tech to Lower Lending Costs
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Credit Risk Outlook for C&I in 2017
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The Business Cycle
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100
120
140
80
60
IndexValue
‘13 ‘17‘09 ‘11‘05 ‘07 ‘15
Recent Investment Activity
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Credit Risk
2%
1%
0%
3%
4%
31-90DaysIndex
‘13 ‘17‘09 ‘11‘05 ‘07 ‘15
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Regional Analysis
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Regional Analysis
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Growth Sectors
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Lagging Sectors
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Industry
Transportation
Construction
Agriculture
Manufacturing
All Industries
Probability of Default Forecast
2009
12.8%
10.4%
2.8%
6.0%
6.3%
2016
4.1%
2.1%
2.1%
1.8%
1.8%
2017
4.5%
2.4%
1.7%
2.0%
2.1%
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AbsolutePD Forecasts Defaults Will Rise in 2017
RESULTING IN BUSINESSES TAKING MORE RISK
ACCELERATION IN LOAN DELINQUENCIES
RISING CREDIT RISK IN SEVERAL KEY INDUSTRIES
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Defaults Will Rise in 2017
RESULTING IN BUSINESSES TAKING MORE RISK
• Acceleration in loan delinquencies
• Rising credit risk in several key industries
• Accelerating economy + rising interest rates
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Fintech – Prepopulated Credit Memo
>
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Fintech - Credit Review
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William Phelan
SBInsights.paynetonline.com/resources(866) 825-3400
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