C&I’s Gonna Take Time - PayNet · ©2017 PayNet Inc. 17 AbsolutePD Forecasts Defaults Will...

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1©2017 PayNet Inc.

Taking the RiskOut of Small

Business Lending

www.paynet.com© 2017 PayNet Inc.

PayNet and PayNet AbsolutePD are registered trademarks of PayNet, Inc.PayNet AbsolutePD Outlook is a service mark of PayNet, Inc.

C&I’s Gonna Take Time

RMA Chapter Leaders ConferenceJune 23, 2017

2©2017 PayNet Inc.

Staying Alive

• C&I Borrowing Soft

• Defaults Rising

• Lending Efficiency via fintech

3©2017 PayNet Inc.

REALITY 1: Governing is Hard Work

EPADodd Frank

ACAInfrastructure

Program

Business Tax Rate

4©2017 PayNet Inc.

REALITY 2: Good Things Take Time

2012

61-101

2016

103-58

5©2017 PayNet Inc.

REALITY 3: Stocks A Bit Ahead of Themselves

S&P 500 +16.9% since the election

6©2017 PayNet Inc.

REALITY 4: Private Businesses Remain Cautious

7©2017 PayNet Inc.

Patience is the Word

If solid measures can be enacted to…

Private Businesses are Positive……But they Doubt Policies will Change Quickly

…They are realists About Cash Flow…Banks Focus on Tech to Lower Lending Costs

8©2017 PayNet Inc.©2017 PayNet Inc.

Credit Risk Outlook for C&I in 2017

9©2017 PayNet Inc.

The Business Cycle

10©2017 PayNet Inc.

100

120

140

80

60

IndexValue

‘13 ‘17‘09 ‘11‘05 ‘07 ‘15

Recent Investment Activity

11©2017 PayNet Inc.

Credit Risk

2%

1%

0%

3%

4%

31-90DaysIndex

‘13 ‘17‘09 ‘11‘05 ‘07 ‘15

12©2017 PayNet Inc.

Regional Analysis

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Regional Analysis

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Growth Sectors

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Lagging Sectors

16©2017 PayNet Inc.

Industry

Transportation

Construction

Agriculture

Manufacturing

All Industries

Probability of Default Forecast

2009

12.8%

10.4%

2.8%

6.0%

6.3%

2016

4.1%

2.1%

2.1%

1.8%

1.8%

2017

4.5%

2.4%

1.7%

2.0%

2.1%

17©2017 PayNet Inc.

AbsolutePD Forecasts Defaults Will Rise in 2017

RESULTING IN BUSINESSES TAKING MORE RISK

ACCELERATION IN LOAN DELINQUENCIES

RISING CREDIT RISK IN SEVERAL KEY INDUSTRIES

18©2017 PayNet Inc.

Defaults Will Rise in 2017

RESULTING IN BUSINESSES TAKING MORE RISK

• Acceleration in loan delinquencies

• Rising credit risk in several key industries

• Accelerating economy + rising interest rates

19©2017 PayNet Inc.

Fintech – Prepopulated Credit Memo

>

20©2017 PayNet Inc.

Fintech - Credit Review

21©2017 PayNet Inc.

William Phelan

SBInsights.paynetonline.com/resources(866) 825-3400

THANK YOU

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