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New research by MYOB and OnDeck Australia has revealed that 93 percent of small business owners have never checked their business credit score.
Surveying 380 small to medium-sized business owners, OnDeck says that the MYOB SME Snapshot highlights there are some major blind spots that need to be addressed.
“Every business has a credit score, even if they don’t realise it, and it’s an important indicator of the health of their business,” said Cameron Poolman, CEO of OnDeck Australia.
“Knowing their score means that business owners are in a much better position to look at funding options for activities such as growing the business, hiring staff, buying stock or smoothing out cashflow.”
The data for the Know Your Score website is provided by credit bureau Veda. To apply, small businesses simply enter their business’s details and receive the free credit score as soon as the application has been submitted.
Small business owner Alison Dean said she was pleasantly surprised by her positive business credit score. Her business, The High Tea Party, has operated for ten years, and holds six events throughout the year across Australia and New Zealand, which can make cash flow a challenge.
“We have thousands of ladies attend each event over a two-day period, and so there are lots of upfront costs for marketing, freight, venues and suppliers. While we generally cover this through careful cash flow management, it’s great to know there are other options that could take the pressure off in the future,” said Dean.
She said applying through the Know Your Score website was easy and fast.
“I work from home and fit a full-time week in around my husband and three kids, so I don’t have time to be visiting banks, digging around for paperwork or anything like that. I used Know Your Score on my mobile phone, it took me less than two minutes and I got the score straight away. It was a positive score too!”
“I don’t know if I will apply for a loan yet – but I like having the option in my back pocket, so to speak. As they say, knowledge is power,” said Dean.
A business credit score is often used by lenders when assessing loan applications and allows businesses to understand the financing options available to them.
Poolman explained that he was not surprised by the finding that the vast majority of businesses have not checked their score.
“OnDeck has talked to thousands of small business owners since we launched in Australia this year, and we know that they are often in the dark about their credit score and their loan options.”
“We encourage every business owner to jump online and spend a minute or two checking their score. It’s totally free and won’t impact your credit rating, so it’s definitely worth doing,” said Poolman.
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