Experian, the leading global information services company, today announced that the Experian/Moody's Analytics Small Business Credit Index rose 1.2 points to 117 due to the growth of small-business credit balances. According to the Q4 2013 report, the increase marked the fourth consecutive quarter of improvement in small-business credit conditions and provided the highest index reading since data tracking began in 2011.

"Credit is flowing more freely to small businesses," said Mark Zandi, chief economist at Moody's Analytics. "With more credit, small businesses are increasingly able to expand their operations. This means more investment and jobs, and a stronger economy."

Findings from the report indicated that the growth in credit balances was due in part to financial institutions loosening credit terms for small businesses, as well as an increase in business-to-business credit transactions.

"The ability to gain access to funding and resources when needed is critical to the growth and success of any small business," said Joel Pruis, Experian's senior business consultant. "The trends seen in Q4 are a good sign for the economy because as more credit options become available to small businesses, the better their chances are to weather the short-term challenges they may face."

While the increased availability of credit contributed to the improvement of the index, growth was tempered by a slight rise in delinquency rates. In Q4 2013, the report found that delinquency rates worsened by 0.1 percentage points, increasing to 10.2 percent from 10.1 percent the previous quarter. Furthermore, the rise in overall delinquency rates can be solely attributed to an increase in 30- to 60-day delinquent balances.

"An important clarification to the rise seen in early delinquency is that only a third of it was attributed to past current accounts becoming delinquent," continued Pruis. "The other two-thirds resulted from slower delinquency buckets falling into the 30- to 60-day range. This means that a greater number of severely delinquent businesses improved their payment performance and reduced their debt."

From a regional perspective, the trends seen throughout most of the recovery continued during the fourth quarter. Credit performance remained strong in the Western region, especially for Mountain West states, while their Eastern counterparts continued to struggle.

"Optimism for the future remains high, as many believe small-business credit conditions will continue to improve in 2014 and well into 2015," said Pruis. "However, in order for small businesses to reap the benefits, it will be extremely important for them to maintain strong credit profiles and pay down any existing delinquent balances."