ATLANTA — Faced with the choice of saving their business over their home, small business owners seriously behind in their mortgage payments would rather see their business stay afloat, a new study from Experian revealed.
Experian compiled a sample of 2.7 million business owners and analyzed the payment behavior of those owners with a mortgage between April 2007 and April 2008. 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. Severe is defined as more than 90 days late, Experian said.
Regardless of the current mortgage crisis, 60% of small business owners were more apt to make prompt payments on their business obligations before and after being delinquent. Fifteen percent made slower payments, followed by 13% who paid faster and 12% who paid slower before and after a mortgage delinquency.
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For credit unions, the findings revealed opportunities to build new and nurture existing relationships with small businesses, said Torsten Gerwien, vice president of decision sciences at Experian Information Services. For one, those that are paying their business obligations faster create a window to extend products and services. This, as business service usage has grown 50% among financial institutions, he added.
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