Business credit line utilization is up. 

As rates stay high, concerns about credit risk and borrower health are top of mind for bank and credit union leaders, especially as it relates to lending to small businesses. In conversations with community banks and credit unions across the country, we’re hearing about a significant increase in line utilization, raising questions about both liquidity and credit risk.

However, recent data from Abrigo shows that privately held companies across the U.S. are displaying their financial resilience. They’re borrowing more, but they’re also managing their leverage and meeting debt obligations —even as they feel the pressure of high rates.

For financial institution leaders and their lenders, this data would indicate that there are opportunities to grow the small business loan portfolio in a safe and sound manner, particularly with rates apparently peaking. A recent U.S. bank survey of 1,000 small businesses found strong optimism about the future among owners.

Abrigo’s proprietary analysis comes from the largest real-time database of private-company financial statement information in the United States. Thousands of banks, credit unions, and accounting firms use our risk management and lending solutions, contributing to this cooperative data model for banking intelligence. Nearly all U.S. businesses are privately held, and most are small, so the unique, aggregated view into how these private firms perform provides leadership teams with insight to make informed decisions about the large and growing small business market.