Private companies are continuing to grow at a healthy pace and experiencing strong profit margins, reducing the likelihood that they will default on loans and other debt, according to a new report.

The financial information company Sageworks found that privately held companies filing annual statements between November 2012 and April 2013 reported annual sales growth of about 10 percent. On average, private companies reported net profit margins close to 7 percent, two percentage points higher than the previous year.

“Aside from their strong sales growth and profit margin expansion, the average probability of default for private companies is lower now than a year ago, showing that loan default rates are falling modestly,” said Sageworks chairman Brian Hamilton in a statement. “Despite this improvement in creditworthiness, companies appear to be taking on less debt than a year ago. The improvement in default rates coupled with healthy sales and profitability show that private companies may be well positioned to borrow.”

In an analysis focusing on seasonal industries, several “summer industries,” including restaurants and sporting goods stores, posted higher sales growth rates during the past year than they did in the previous year. Others, such as gas stations, have seen a sharp drop in annual sales growth compared to last year.

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