Small Business Lending Decreased in March 2025

THE EQUIFAX MARCH SMALL BUSINESS LENDING INDEX (SBLI) showed that nominal small business lending decreased by 7% month-over-month and 8% year-over-year. The SBLI three-month moving average decreased 4.4% month-over-month and 6.5% year-over-year.

Meanwhile, the Equifax Small Business Delinquency Index (SBDI) 31-90 Days Past Due increased slightly to 1.69% in March 2025, up two basis points month-over-month. The Index is flat year-over-year. The SBDI 91–180 Days Past Due remained flat at 0.69% from February 2025 to March 2025. The Small Business Default Index decreased to 3.33% and was down six basis points month-over-month. 

According to the latest report, the Equifax SBLI suggests that small business lending fell in March (-7% M/M, -8.0% Y/Y), reflecting mounting caution among businesses and lenders in the face of heightened economic uncertainty. Over the last two months, the SBLI

has fallen 12.3%, the largest two-month decline since March and April 2020 (and among the largest in series history). U.S. economic data over the last month have been mixed. Consumer and small business sentiment measures (i.e., “soft data”) have declined steadily for several months, while “hard data” such as hiring and consumer spending are more positive and suggest that economic conditions, while somewhat weaker than in 2024, remain healthy overall.

Regional Analysis

Small Business Lending:

In March, 33 states had a year-over-year decrease in 12-month rolling lending volumes. Of the ten largest states, five showed a decrease from 2024. California and Georgia both decreased 11%, Florida decreased 4%, and Texas dropped 1%. Ohio showed 4.5% growth from last year while Michigan and Illinois both grew ~3%. Of all states, North Dakota (+21%), New Mexico (+13%) and Iowa (+12%) had some of the highest growth numbers from last year. Nevada (-17%) and Wyoming (-11%) posted some of the largest decreases from March 2024.

Month-over-month, nominal lending activity was down in 33 states in the preceding 12 months, including six of the ten largest states. California had the largest decrease (-1.1%) of these ten in the 12-month period ended in March 2025 as compared to the 12-month period ended in March 2024. Illinois grew 0.5% and Texas grew 0.3%. 

Small Business Delinquency and Default:

Defaults increased in 35 states annually but decreased in the majority of states (40 of 50) month-over-month. Year-over-year, Georgia improved nearly 22%, while Maine had the largest default rate increase, jumping 53%. Florida (4.5%), Louisiana (4.4%), and Texas (4.4%) had the highest overall default rates amongst all states. North Dakota (1.8%), Iowa (2.2%) and Nebraska (2.3%) had the lowest. Of the ten largest states, only Texas slightly increased default rates month-over-month. The remaining states decreased default rates over February 2025, led by New York which dropped by almost 5%.

In 31-90 day delinquency, 32 states had a decrease in delinquency month-over-month. Florida (3.0%), Connecticut (2.8%), and Georgia (2.6%) had the highest delinquency rates in March 2025, while South Dakota (0.6%), Ohio (1.1%)  and Minnesota (1.2%) had the lowest. Maine showed the largest annual increase in delinquency, rising 94 basis points since last March. Of the ten largest states, Michigan (+14 bps), Pennsylvania (+10 bps), and Texas (+ 6 bps) had the largest year-over-year increases. North Carolina decreased 28 bps from March 2024, Florida decreased 11 bps and Illinois decreased 11 bps.

Industry Analysis

Small Business Lending: 

• In March 2025, nominal small business lending fell in 15 of the 17 tracked industries month-over-month, holding steady in Retail Trade, Construction, and Arts, Entertainment, and Recreation.

• 12-month rolling lending activity weakened most month-over-month (-2%) in both Information and Other Services (except Public Administration).

• Compared to March 2024, lending rose most in Arts, Entertainment, and Recreation (+5%), followed by Health Care and Social Assistance (+2%), and Finance and Insurance (+2%). Lending fell in Information (-10%), Other Services (except Public Administration) (-8%), and Transportation and Warehousing (-8%).

Small Business Delinquency and Default:

• In March 2025, the annualized Small Business Default Index rose or held steady month-to-month in nine of the 17 tracked industries, with the largest increase in Arts, Entertainment, and Recreation (+10%).

• On an annual basis, from March 2024 to March 2025, the SBDFI increased in 12 of the 17 tracked industries, led by Arts, Entertainment, and Recreation (+31%), Mining, Quarrying, and Oil and Gas Extraction (+27%), and Agriculture, Forestry, Fishing and Hunting (+25%).

• On an annual basis, the 31-90 day SBDI increased 4% in the Construction industry and 1% in Health Care vs. March 2024. All other segments improved, with Agriculture decreasing 17% and Transportation dropping 12% from last year.

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.