Delinquency, Charge-Off Rates Falling for Bus Loans

Scott Grannis had a post on Friday about the recent acceleration in commercial bank lending to businesses, which grew at 15.2% annualized rate over the last quarter.  In another sign of improvement in credit conditions for small and medium-sized companies, the chart above shows the significant decreases over the last two years in the delinquency rates and charge-off rates for business loans at all U.S. commercial banks.  

The delinquency rate for business loans fell for the eighth straight quarter in 2011 Q4 to 1.59%, the lowest rate since the first quarter of 2008, and the charge-off rate fell to 0.66%, the lowest rate since the first quarter of 2007.  

The credit market for bank lending to America's small and medium-sized businesses is gradually recovering and slowly returning to the pre-recession conditions.