Introducing the WAIN Street BDX

“I’ll be there in 15 minutes…”

It’s an easy thing to say at the beginning of a trip, before a well-planned route deteriorates into a confusing mess of detours and wrong turns. Unexpectedly veering off course can be a frustrating and time consuming experience; but when you finally get there… well, the feeling is pretty good.

WAIN Street’s got that good feeling. Creating the Business Credit Health Index (BCH Index) was a more monumental task than we could have ever imagined and we’ve developed an intimate understanding of why it’s never been done. Using monthly information about nearly 30 million US businesses, WAIN Street has to derive meaningful insights from billions of individual data points; it’s like trying to drink water from a fire hose… not easy. Yes, it took some time.  And now we make good on our promise to boil it all down and provide a robust, unique, and granular index. Something that’s actually useful for more than creating 17-variable regressions and “interesting” color coded 3D surface plots.

After such a long journey filled with numerous starts and stops, changes in direction, dead ends, and false finishes, the time has come to share with our readers the WAIN Street Business Default Index (BDX). The WAIN Street BDX, a component of the BCH Index, captures occurrence of credit defaults nationally.

To understand its relevance, we took monthly BDX data going back to 2010 and examined it against a variety of other national indicators like the Consumer Confidence Index, the Federal Reserve’s commercial bank performance data and Gallup’s economic indexes; the correlations suggest that WAIN Street is tapping into something really exciting and unique. Business credit, particularly middle market and small business (SMB) credit, represents a fundamental intersection of Main Street and Wall Street; it’s a direct interaction between the companies that power most of the economy and the financial gatekeepers controlling the flow of life-blood capital. It’s the pulse of the American economy; and it’s a pulse that must be taken both to illuminate and to support the engines of the economy.

The BCH Index is now keeping watch over the collective credit health of the nation and will soon be publicly available at the end of each month via the WAIN Street National Credit Health Report.  WAIN Street is working to harness the power of the BCH Index for products and services that can help the financial industry better serve mid-market and small companies.

We also realize that this massive aggregation of data contains knowledge that can only be unlocked through the combined efforts of experts in finance, economics, statistics and other disciplines. It is our desire to use the BCH Index as a catalyst for greater collaboration between industry, academia and government to bridge the divide between Main Street and Wall Street.  To discuss ideas, please email our founder Vidur Dhanda.