Private-company credit risk shows signs of improving

Privately held U.S. companies, on average, have a slightly improved credit position than a year ago, according to new data from Sageworks Inc., a financial information company.

Using a predictive statistical model to evaluate privately held companies in Sageworks’ proprietary database, the firm found that the average probability that a private company would default in the next year was 4.40 percent for the 12-month period ended Dec. 31, compared with 4.51 percent for the year-earlier period.

Sageworks collects financial statements for private companies from accounting firms, banks and credit unions through its cooperative data model, aggregating the data at an approximate rate of 1,000 statements a day, and analyzing the performance.