Finance and Insurance Recovering from COVID-19 Effects Faster Than Other Industries

In an examination of small business funding trends, the Biz2Credit Recovery Ranking for 2021 found that businesses in the financial services and insurance industry have recovered the fastest from the COVID-19 pandemic compared with other industries. According to Biz2Credit, companies in the financial services and insurance industry have experienced the greatest strength of recovery from COVID-19 lockdowns because they have had a high demand for expansion capital but a low level of distress.

The new Biz2Credit Recovery Ranking identified top recovering industries based on the number of loans approved in the first two rounds of the Paycheck Protection Program as well as overall demand for growth capital from small businesses in different economic sectors. The proprietary research examined the industries that have experienced a greater degree of recovery from the pandemic and are in a stronger financial position in 2021 relative to 2020.

This new ranking matrix measures the resiliency of businesses across different industries based on their ability to bounce back from the economic shock of the pandemic. The Biz2Credit Recovery Ranking was created to assess the extent of recovery from the COVID-19 pandemic across industries.

The ranking is a proprietary measure of demand for financing and an industry’s need for government-provided relief. The higher the percentage, the better an industry is recovering.

Biz2Credit Recovery Ranking Matrix

Higher Credit Demand, Higher Recovery (Quadrant I)

Industries in this quadrant have had a high demand for credit and are better positioned to benefit from access to additional capital. These industries include finance and insurance, retail trade, administrative and support, and waste management and remediation services.

Lower Credit Demand, Higher Recovery (Quadrant II)

Industries in this quadrant have been relatively less impacted by the pandemic and are anticipating a recovery without exhibiting high demands for growth capital. Such industries include real estate and rental and leasing and services (except public administration).

Higher Credit Demand, Lower Recovery (Quadrant III)

Industries in this quadrant have had a high demand for credit but have also required considerable assistance from government lending programs, especially the PPP. These industries include information technology (IT); professional, scientific and technical services; accommodation and food services; healthcare and social assistance; wholesale trade; and manufacturing.

Lower Credit Demand, Lower Recovery (Quadrant IV)

Industries in this quadrant have been severely impacted by the pandemic and are experiencing a slow recovery, aided in most cases by significant government relief financing. These industries include construction; transportation and warehousing; educational services; arts, entertainment and recreation; and public administration.

“In this report, our data scientists have found that small businesses in particular industries experienced a greater level of recovery from the impacts of the pandemic. Financial and real estate businesses did exceptionally well at recovering from the pandemic,” Rohit Arora, CEO of Biz2Credit, said. “Retail also rebounded financially. Their challenges now are related to the supply chain rather than consumer demand.”

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