ATLANTA — Small business owners behind in their mortgage payments are more likely to save their businesses rather than their homes according to a new study from Experian.

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. Experian defined severe as more than 90 days late.

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, the findings showed.

While business owners were less likely to become severely delinquent on their mortgages with three out of every 100 falling into this category, the rate of late payments decreased by 57% during the April 2007 to April 2008 time period. As many as 312,000 business owners were in trouble with their home loan.

“It was one of the surprises we got from the study,” said Torsten Gerwien, vice president of decision sciences at Experian Information services, on business owners choosing to save their business over their home. “We wanted to see the impact when business owners commingle their assets.”

For credit unions and other financial institutions, the findings revealed opportunities to build new and nurture existing relationships with small businesses, Gerwien said. For one, those that are paying their business obligations faster create a window to extend products and services, as business service usage has grown 50% among financial institutions. Looking at blended scores, rather than individual and business scoring, is one alternative to assess risk going forward, he added.

The study also found that after mortgage delinquency, credit usage tends to shift from personal to business. Consumer balance outstanding dropped nearly 50% after mortgage delinquency while credit utilization decreased 16%. However, on the business side, balances increased more than 50% and credit utilization also increased by 11%.

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, according to the study. Another 15% made slower payments, followed by 13% who paid faster and 12% who paid slower before and after a mortgage delinquency.

The industries that have been hit the hardest by the mortgage crisis are understandably construction and real estate but transportation areas have succumbed under the weight of rising oil costs, according to the study. A slowdown in consumer spending has also hammered retail trade.

Meanwhile, small business owners are relying on commercial lending options more often than personal to support their businesses, Experian found. Gerwien said part of that shift may be tied to creditors acting to reduce risky exposure on the consumer side.

“What surprised us most is as personal credit is reduced, business credit increased,” Gerwien pointed out. “As lenders managed risks downward, commercial balances increased by 50%.”

“If they just look at the personal side, they may be missing opportunities. As credit unions talk to their business owners, they should send the message that credit is still out there and available [for those who make their payments on time],” Gerwien said.

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