Small firms continued to reduce their delinquent debt over thepast year and their credit quality followed suit, according to thelatest data from Experian.

Consumer confidence is high and small business credit qualityhas shown improvements throughout the quarter due to personalincome growth, retail sales increases and steady employment gains,the Experian/Moody's Analytics Small Business Credit Indexrevealed.

Findings from the report showed that small firms have steadilyreduced their delinquent debt over the past year. Balance volumesfor all business sizes also receded measurably from a year earlier,bringing down delinquency rates, according to the report.

Further, credit quality has strengthened for every businesssize. At an average of 10.2%, the total share of delinquent dollarsis 2.4 percentage points lower than it was a year ago and is at thelowest point on record.

“During this period of modest growth, small businesses have improved their credit profile bydecreasing delinquent debt and meeting financial obligations in amore timely fashion,” said Joel Pruis, Experian's senior businessconsultant.

Businesses of all sizes need to maintain a strong creditprofile, as it enables them to more easily secure the credit orfunding they need to grow their enterprise, Prius suggested.

Regionally, delinquency rates were significantly lower than thenational average for small companies in Idaho, Wyoming, Arizona andUtah, the report showed.

At the top 10th percentile among metro areas for small businesscredit quality were Houston, Las Vegas, Phoenix, Salt Lake City,San Diego and San Francisco.

“The economy has held up better than anticipated so far thisyear in the face of large tax increases and government spendingcuts, which has supported improved small business borrowing andcredit quality,” said Mark Zandi, chief economist at Moody'sAnalytics.