Experian, the leading global information services company, today announced new insights from its Experian/Moody's Analytics Small Business Credit Index that showed small businesses continue to have access to a wider availability of credit as credit conditions reached the highest level on record, improving for the third consecutive quarter. According to the most recent report, outstanding credit balances grew by 2.2 percent from a year ago, while delinquency rates declined to a cyclical low of 8.5 percent, both of which contributed to the improvement in the index.

"Small businesses are finally kicking into high gear," said Mark Zandi, chief economist for Moody's Analytics. "They are investing and hiring more and are borrowing more to finance their expansion. They are also repaying what they have already borrowed in a more timely way. Business conditions are much improved and will likely improve even more in coming quarters."

Findings from the report also showed that small businesses have helped themselves, improving their risk and payment behavior across the board. Most notably, over the last year, small businesses have reduced the number of days they paid their bills beyond contacted terms by full a day, or more than 19 percent. Over the same time period, the average commercial risk score1 for a small business rose 3.1 percent to reach 61.6, while bankruptcy rates dropped significantly, with 10.9 percent fewer businesses filing.

"Over the last several quarters, we've seen small-business credit conditions continuously soar to new heights, making the struggles in the early part of 2014 seem like a distant memory," said Dan Meder, vice president for Experian's Business Information Services. "It will be interesting to see if small businesses can continue to maintain this payment behavior as we move through 2015. If they can, the credit spigot will continue to widen, opening up more opportunity for small businesses to grow."

"Small businesses, however, are not the only ones benefitting from improved payment performance. It's also a good sign for lenders and suppliers, as increased confidence in small businesses' ability to pay can lead to increased availability of credit and more sales," continued Meder. "With that said, lenders and suppliers will want to keep a close eye on how the data continues to trend. The insight that they can extract from observing payment trends will enable them to take the right action to reduce risk and make more confident decisions."

From a regional perspective, small-business credit quality continues to be split, with western states faring better than those east of the Mississippi. Small businesses in the Mountain West region enjoy substantially lower delinquency rates than the rest of the country, while those in the Northeast and Midwest continue to lag as the housing market recuperates.