the state of u.s. business credit€¦ · 5/1/2017 experian public vision 2017 0.0 0.2 0.4 0.6 0.8...

The state of U.S. business credit

Introducing:

Cris DeRitis Moody’s Analytics

Elizabeth Vega Experian

Pete Bolin Experian

©Experian 3

Macro economic trends: Moody’s Analytics

5/1/2017 Experian Public Vision 2017

©Experian 4

-1000

-800

-600

-400

-200

0

200

400

600

06 07 08 09 10 11 12 13 14 15 16 17

0

2

4

6

8

10

12

14

16

18

Employment, chg (L)

Unemployment rate, % (R)

Broad Unemployment rate U6, % (R)

Full employment is here


Sources: BLS, Moody’s Analytics

Nonfarm payrolls monthly change; Unemployment rate

©Experian 5

Labor demand remains strong

0

1

2

3

4

5

6

7

01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

Openings Hiring

Quits Layoffs

Mill

ion

s

Source: BLS


©Experian 6

06 07 08 09 10 11 12 13 14 15 16 17

-1000

-800

-600

-400

-200

0

200

400

600

1-19 20-49 50-499 500-999 1000+

Most job creation from mid-size businesses


Sources: ADP, Moody’s Analytics

Nonfarm payrolls monthly change by number of employees

©Experian 7

50

60

70

80

90

100

110

120

130

05 06 07 08 09 10 11 12 13 14 15 16

Housing provides a tailwind


Sources: CoreLogic, FHFA, Moody’s Analytics

Case-Shiller House Price Index®, % of prerecession peak

WSC*

ESC

WNC

NEC

ENC

MAC

PAC

MTN

SAC

By Census division:

* Uses FHFA data

©Experian 8

25

26

27

28

29

30

31

32

33

15

16

17

18

19

20

21

22

23

24

83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15

Millions (L)

Percent (R)

Many pent-up households waiting to form


Sources: Census

18-34 year olds living with their parents

©Experian 9

0

20

40

60

80

100

120

140

80

90

100

110

06 07 08 09 10 11 12 13 14 15 16 17

Small Business Optimism, 1986=100 (L)

Conference Board, 1985=100 (R)

Consumer and business confidence recovers


Sources: Conference Board, NFIB, Moody’s Analytics

©Experian 10

• Quarterly report, combining Experian business credit data and Moody’s Analytics economic analysis

• Brings deeper insights to the overall financial well-being of the small business landscape

• Provides macro-economic outlook on trends and what they mean for credit grantors and the small business community as a whole

• Includes a combination of business credit data (credit balances, delinquency rates, utilization rates, etc.) and macroeconomic information (employment rates, income, retail sales, investments, etc.)

Experian / Moody’s Analytics Main Street report


©Experian 11

SBA loan volumes up 10% YTD vs. last year


0

2

4

6

8

10

12

14

2012 2013 2014 2015 2016 2017

Source: SBA, Moody’s Analytics

SBA 7(A) Loan Originations through April each year, $ billions

©Experian 12

Small business credit utilization rising

34

36

38

40

42

44

46

48

Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17

Source: Experian, Moody’s Analytics

Utilization rate, % of available credit


©Experian 13

Business delinquencies keep falling…


0

1

2

3

4

5

6

7

8

9

Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17

30 DPD 60 DPD 90 DPD 91+ DPD


% of credit trades delinquent for small businesses

©Experian 14

… as do bankruptcy filings

0.00

0.05

0.10

0.15

0.20

0.25

Mar-15 Sep-15 Mar-16 Sep-16 Mar-17


% of small businesses filing for bankruptcy


©Experian 15

Performance mixed across the country


% of small businesses 60 DPD as of 2017Q1

©Experian 16

Mining and energy extraction industry turning a corner


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2015q1 2015q2 2015q3 2015q4 2016q1 2016q2 2016q3 2016q4 2017q1

Agriculture Mining/Energy Construction Manufacturing Transportation

Wholesale Retail Services Public Admin


% 90 DPD

©Experian 17

Construction industry reaches new plateau


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2015q1 2015q2 2015q3 2015q4 2016q1 2016q2 2016q3 2016q4 2017q1




% 90 DPD

©Experian 18

Manufacturing shows steady improvement


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2015q1 2015q2 2015q3 2015q4 2016q1 2016q2 2016q3 2016q4 2017q1




% 90 DPD

©Experian 19

Agriculture performance remains steady


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2015q1 2015q2 2015q3 2015q4 2016q1 2016q2 2016q3 2016q4 2017q1




% 90 DPD

©Experian 20

… even as farm incomes weaken


0

20

40

60

80

100

120

2008Q1 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1 2017Q1

Source: BEA, Moody’s Analytics

Farm proprietor income, $ billions, SAAR

©Experian 21

Retail is surprisingly resilient


0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2015q1 2015q2 2015q3 2015q4 2016q1 2016q2 2016q3 2016q4 2017q1




% 90 DPD

©Experian 22

E-commerce growing… but, still small


Sources: Census Bureau, Moody’s Analytics

0

3

6

9

0

1

2

3

4

5

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Total ex e-commerce (L)

E-commerce (L)

E-commerce share, % (R)

Retail sales, $ trillions

©Experian 23

Vision 2017 hot topic


©Experian 24

Wealth Insight ServicesSM

The new data benchmark in wealth-based strategy and targeting


©Experian 25

U.S. wealth has become increasingly concentrated at the top

Source: Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data, Emmanuel Saez and Gabriel Zucman, August 2015. Inequality.org

Wealth Shares, United States, 1913 - 2012

The top 1% of the U.S. population holds over 40% of total wealth, 40 years ago they held less than 25%


©Experian 26

The wealth divide is even greater among business owners


Source: Wealth Opportunity Score and Experian Business Information Services database.

• The top 10% of business owners hold 22 times more wealth than the previous population decile

• 60% of business owners hold less than $100K in liquid investible wealth

$-

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

1 2 3 4 5 6 7 8 9 10

Ave

rag

e h

ou

se

ho

ld w

ea

lth

Household wealth by population decile

Population decile

All U.S. households

Small business owners

$163K

$112K

$1.5M $238K

$181K

$9.5M

Less than $100K investable wealth $425K

$265K

22 times

©Experian 27

Getting the complete financial picture


Card

Mortgage

Home equity/

auto loans

Income

Spending

Checking /

bank deposits

Investments

©Experian 28

• Unparalleled data

– 90+% of all retail registered shares

– Over 850 participating financial institutions

• Faster – monthly updates within 6 weeks of period close

• Fresher – 75+% of securities refreshed each month

• More comprehensive – common keyed data view across wealth, marketing, credit and auto

• Unmatched data granularity

– Patent pending methodology

– Preserves granularity, accentuates meaningful differences, ensures anonymity

Better data – better decisions


Most dynamic, granular

and actionable measures of

liquid investable wealth

Equities

Money market funds

Mutual funds

Bonds

Exchange traded funds

Bank deposits

Strategic alliance:

©Experian 29

Full national data set

Regional subset Attribute subset

Client file

append

Prospect

list

Decision

as a ServiceSM

Product delivery

Wealth Opportunity Score™ 1,600+ Wealth Insight Attributes™

Household wealth Marketing

demographics

Auto ownership

Household credit

• Micro-segment technology: 7 households min.

• Non-FCRA use: segmentation, planning, marketing

• National coverage: 11M+ micro-segments

• Household score: liquid investable wealth

• Non-FCRA use: marketing, planning, targeting

• National coverage: 110M+ households

The Wealth Insight ServicesSM product line


©Experian 33

Results of risk modeling

16.3

23.3

0.0

5.0

10.0

15.0

20.0

25.0

KS

Demographic only – thin file population

IPV2 Custom IPV2 and WOS

43% lift


©Experian 34

Results of risk modeling


0%

2%

4%

6%

8%

10%

12%

1 2 3 4 5 6 7 8 9 10

Inte

rva

l b

ad

ra

tes

Demographic only – thin file population

IPV2 Custom IPV2 and WOS

©Experian 35

Modeling results for marketing


10.74% 10.66%

9.84% 9.77%

9.48%

8.5

9.0

9.5

10.0

10.5

11.0

$0 - $15,000 $15,001 - $40,000 $40,001 - $100,000 $100,001 - $150,000 $150,0001 - $90,000,000

In th

e m

ark

et ra

te %

Estimated wealth

Rank ordering by wealth

©Experian 36

Introduce trended solutions


0

10,000

20,000

30,000

40,000

50,000

60,000

0

5

10

15

20

25

30

35

Ave

rag

e p

lastic

sp

en

d P

erc

en

t o

f p

op

ula

tio

n

Estimated wealth

Gender based ownership

Women Owned Male Owned Women Owned Avg Plastic Spend Male Avg Plastic Spend

©Experian 37

Which industries to target?


20

25

30

35

40

45

50

55

60

65

70

0

2

4

6

8

10

12

14

16

Finance,Insurance and

Real Estate

PublicAdministration

Retail Trade Services Construction ManufacturingTrans, Comm,Electric, Gas,

Sanitary

Agriculture,Forestry and

Fishing

WholesaleTrade

Mining

In the market for credit and risk

In th

e m

ark

et ra

te p

erc

en

tage

A

ve

rag

e IP

V2

©Experian 38

Which industries to target?


0%

2%

4%

6%

8%

10%

12%

0

2

4

6

8

10

12

14

16

Finance,Insurance and

Real Estate

PublicAdministration

Retail Trade Services Construction ManufacturingTrans, Comm,Electric, Gas,

Sanitary

Agriculture,Forestry and

Fishing

WholesaleTrade

Mining

In th

e m

ark

et ra

te p

erc

en

tage

B

ad

rate

©Experian 39

Where to target?


0

5

10

15

20

Pe

rce

nt o

f p

op

ula

tio

n

Estimated wealth

Top “three in the market” SIC

Agriculture, Forestry and Fishing Wholesale Trade Mining

©Experian 40

Why to target here?

37.1 34.5

32.9 30.3

28.1

44

46

48

50

52

54

56

58

0

5

10

15

20

25

30

35

40

45

50

0-$225,000 $225,001-$350,000 $350,001-$600,000 $600,001-$3,000,000 $3,000,001-$90,000,000

Avera

g3 IP

V2 s

core

M

icro

-bu

sin

ess r

ate

(%

1-2

em

plo

ye

es)

Estimated wealth

Micro-businesses and wealth


©Experian 42

Share your thoughts about Vision 2017!


Please take the time now to give us your feedback about this session.

You can complete the survey at the kiosk outside.

How would you rate both the Speaker and Content?

the state of u.s. business credit€¦ · 5/1/2017 experian public vision 2017 0.0 0.2 0.4 0.6 0.8...

Documents