Small Business Lending Increased in September 2025

THE EQUIFAX SEPTEMBER  SMALL BUSINESS LENDING INDEX (SBLI) showed that nominal small business lending volumes increased 6.4% month-over-month and 7.4% year-over-year. The SBLI three-month moving average increased 1.8% month-over-month and remained steady year-over-year.

Meanwhile, the Equifax Small Business Delinquency Index (SBDI) 31-90 Days Past Due decreased 4 basis points from 1.76% in August to 1.72% in September 2025. The 31-90 SBDI decreased 10 basis points (6%) year-over-year. The SBDI 91–180 days past due remained level at 0.71% from August 2025 to September 2025. The Small Business Default Index (SBDFI) remained level at 3.26% and was down two basis points month-over-month. 

In September, small business lending increased 6.4% from August and is up 7.4% year-over-year, though the index is down 4.8% year-to-date. Delinquencies of 91-180 days remain flat compared to last month while delinquencies of 31-90 days and defaults fell by four basis points and two basis points, respectively. 

Although official government data has not yet been released given the recently-concluded government shutdown, private sector data suggests labor markets rebounded modestly in October after contracting in September. Still, small business job growth is showing signs of strain. Easing some of Main Street’s anxiety, the Federal Reserve cut interest rates by 25 basis points at its most recent meeting, and markets expect another cut in December.

Regional Analysis

Small Business Lending:

In September, 32 states had a year-over-year increase in 12-month rolling lending volumes. Of the 10 largest* states, eight showed an increase from 2024. Illinois had the strongest improvement at 4.8%. California decreased the most at -10%. Of all states, Montana (+16%), Oklahoma (+13%) and Kansas (+12%) had some of the highest growth numbers compared to the same period last year. Alaska (-15%) and California (-10%) posted the largest decreases from September 2024 of all states.

Despite year-over-year increases, the month-over-month change in 12-month lending volumes showed more decreases than early 2025. Month-over-month, nominal lending activity was down in 26 states in the preceding 12 months, including six of the 10 largest states. Only two states showed increases greater than 1%: Georgia (+1.7%)  and Ohio (+1.2%) in the 12-month period ending in September 2025 as compared to the 12-month period ending in September 2024. Of all states, Alaska (-4% month-over-month) and California (-3% month-over-month) decreased the most.

Small Business Delinquency and Default:

Defaults decreased in 37 states year-over-year and decreased in 31 states month-over-month. Year-over-year, New York improved by 35%, while Utah had the largest default rate increase, jumping 15%. Florida (4.5%), Texas (4.5%) and California (4.3%) had the highest overall default rates among all states. North Dakota (2.0%),  Pennsylvania (2.1%), and Vermont (2.2%) had the lowest. Of the 10 largest states, four states increased default rates month-over-month: Georgia (+2.7%), Texas (+2.1%), Illinois (+0.8) and Florida (+0.3%). The remaining states decreased default rates month-over-month, led by New York which dropped by 5%.

In 31-90 day delinquency, 32 states had a decrease in delinquency month-over-month. Wyoming (3.9%), Florida (2.9%), Georgia (2.7%) and South Carolina (2.4%) had the highest delinquency rates in September 2025, while South Dakota (0.8%), Ohio (0.9%) and Iowa (1.1%) had the lowest. Wyoming showed the largest year-over-year increase in delinquency, rising 58 basis points since last September. Of the 10 largest states, Michigan (+16 basis points) and Illinois (+11 basis points) had the largest year-over-year increases. North Carolina decreased 35 basis points from September 2024, and California dropped 21 basis points.

Industry Analysis

Small Business Lending: 

• In September 2025, nominal small business lending fell in five of the 17 tracked industries month-over-month, holding steady in Transportation and Warehousing, Retail Trade, and Finance and Insurance.

• 12-month rolling lending activity weakened most month-over-month (-5%) in Educational Services.

• Compared to September 2024, lending rose the most in Arts, Entertainment, and Recreation (+5%), followed by Construction (+4%), and Real Estate and Rental and Leasing. Lending fell in Information (-12%), Other Services (except Public Administration) (-8%), and Transportation and Warehousing (-5%).

Small Business Delinquency and Default:

• In September 2025, the annualized SBDFI rose or held steady month-over-month in five of the 17 tracked industries, with the largest increase in Finance and Insurance (+4%).

• From September 2024 to September 2025, the SBDFI increased in 10 of the 17 tracked industries, led by Arts, Entertainment, and Recreation (+22%), Information (+13%), and Agriculture, Forestry, Fishing and Hunting (+9%).

• From September 2024 to September 2025, the 31-90 day SBDI was flat in the Construction industry. All other segments improved, with Transportation dropping 15% and Health Care decreasing 11%.

Produced monthly, the Small Business Indices help lenders and businesses track changes in the small business marketplace by providing insights into lending, default and delinquency trends. To learn more and view the latest reports, check out our Small Business Indices page.

*By population