New Experian Research Highlights the Effects of the Mortgage Meltdown on Small Businesses
Study provides an in-depth analysis into the payment priorities of the small-business owner
Costa Mesa, Calif., Sep 08, 2008 — Experian®, a global information services company, today announced the results of a comprehensive study that examines the payment behavior of the small-business owner in relation to the current mortgage crisis. The study found that business owners with a severe mortgage delinquency were more likely to pay their business obligations instead of their mortgage. Experian's research showed that because of deteriorating equity, high mortgage payments and limited refinancing options, business owners chose to ensure the business' survival, preserving their source of income at the risk of losing their home. Furthermore, the study found that small-business owners are relying on commercial lending options more often, instead of personal financing options, to support their businesses.
The study's purpose was to determine the impact of a severely delinquent mortgage payment on a business owner's personal and business credit behavior. For the report, Experian compiled a sample of 2.7 million business owners and analyzed the payment behavior of those owners with a mortgage over the course of one year.
"Experian's mission is to provide organizations and consumers with the information they need to be successful and make better financial decisions," said Kerry Williams, group president of Experian's Credit Services and Decision Analytics. "As seen with this study, we are dedicated to researching and reporting the impact of current economic trends on the credit community in order to provide valuable insight affecting the global marketplace."
To complete the study, Experian leveraged proprietary data from its Business Owner Link database, which connects small-business owners and their home address. Experian is the only company to offer this unique look into the small-business marketplace.
A sample of the study's initial findings includes:
- Analysis of the business industries and regions most affected by the housing crisis
- Impact of the mortgage crisis on businesses based on their size and age
- Examination of credit usage following a mortgage delinquency
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