Small Business Lending Decreased in June 2025

THE EQUIFAX JUNE SMALL BUSINESS LENDING INDEX (SBLI) showed that nominal small business lending decreased by 3.3% month-over-month but increased 2.2% year-over-year. The SBLI three-month moving average increased 1.0% month-over-month but decreased 0.3% year-over-year.

Meanwhile, the Equifax Small Business Delinquency Index (SBDI) 31-90 Days Past Due increased to 1.76% in June 2025, up three basis points month-over-month. The SBDI decreased one basis point year-over-year. The SBDI 91–180 Days Past Due increased slightly (1 bp) to 0.71% from May 2025 to June 2025. The Small Business Default Index (SBDFI) decreased to 3.27% and was down seven basis points month-over-month. 

Small business lending fell 3.3% month-over-month in June, and although the SBLI three-month-moving average ticked up 1.0%, this was due to robust growth in April that has been largely reversed. Credit quality appears to have stabilized: short-term delinquencies rose modestly but are essentially equivalent to levels from a year ago, while defaults fell seven basis points month-over-month. Recent data suggest that the labor market has weakened in recent months, and higher tariffs are beginning to put upward pressure on prices. Lower interest rates are likely in Q3 and Q4, which should provide a boost to small business lending but may also exacerbate inflationary pressures.

Regional Analysis

Small Business Lending:

In June, 23 states had a year-over-year decrease in 12-month rolling lending volumes. Of the ten largest states, three showed a decrease from 2024. California decreased 10%, Georgia decreased 6%, and Florida decreased 1%. Pennsylvania showed 4% growth from last year while Texas grew 2%. Of all states, Iowa (+12%), South Dakota (+12%) and North Dakota (+10%) had some of the highest growth numbers from last year. California as well as Nevada posted the largest decreases (-9%) of all states from June 2024.

Month-over-month, nominal lending activity was down in 31 states in the preceding 12 months, including two of the ten largest states. The other eight states (of the ten largest) increased by less than 1% in the 12-month period ended in June 2025 as compared to the 12-month period ended in June 2024. California showed the largest month over month increase, decreasing 8%.

Small Business Delinquency and Default:

Defaults decreased in 34 states annually and decreased in 45 states month-over-month. Year-over-year, New York improved 28%, while Maine had the largest default rate increase, jumping 35%. Florida (4.4%), Texas (4.3%) and Louisiana (4.2%) had the highest overall default rates amongst all states. North Dakota (1.9%), Iowa (2.1%), and Nebraska (2.2%) had the lowest. Of the ten largest states, three states increased default rates year-over-year: Pennsylvania (+12.4%), Texas (+1.8%) and California (+0.8%). 

In 31-90 day delinquency, 20 states had an increase in delinquency month-over-month. Florida (2.9%), Wyoming (2.7%) and Georgia (2.6%) had the highest delinquency rates in June 2025, while South Dakota (0.9%), Ohio (1.0%) and Iowa (1.1%) had the lowest. North Dakota showed the largest annual increase in delinquency, rising 107 basis points since last June. Of the ten largest states, Michigan (+18 bps), Georgia (+17 bps) and Florida (+7 bps) had the largest year-over-year increases. North Carolina decreased 21 bps from June 2024, California decreased 9 bps, and Ohio and Pennsylvania both dropped 7 bps.

Industry Analysis

Small Business Lending: 

• In June 2025, nominal small business lending fell in six of the 17 tracked industries month-over-month, holding steady in Retail Trade, Construction, and Finance and Insurance. 

• 12-month rolling lending activity weakened most month-over-month (-3%) in Accommodation and Food Services.

• Compared to June 2024, lending rose most in Arts, Entertainment, and Recreation (+8%), followed by Educational Services (+4%). Lending fell in Accommodation and Food Services (-7%), Other Services (except Public Administration) (-7%), and Information (-6%). 

Small Business Delinquency and Default:

• In June 2025, the annualized SBDFI rose or held steady month-to-month in five of the 17 tracked industries, with the largest increase in Wholesale Trade (+2%).

• On an annual basis, from June 2024 to June 2025, the SBDFI increased in 11 of the 17 tracked industries, led by Mining, Quarrying, and Oil and Gas Extraction (33%), Arts, Entertainment, and Recreation (32%) and Information (18%).

• On an annual basis, the 31-90 day SBDI increased 5% in the Construction industry and 1% in Retail vs. June 2024. All other segments improved, with Transportation dropping 14% from last year and Agriculture decreasing 6%.

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.