SME Credit Score has launched a credit scoring tool for Australian small and medium sized businesses, allowing them to get their credit score and be matched with an appropriate finance lender. The free tool matches a business with a lender based on an algorithm that incorporates the business credit score, together with an individual’s circumstances and requirements of the business. The underlying credit score is sourced from Veda, and the loan application is made directly with the lender.
To connect businesses, SME Credit Score looks at a number of factors, such as whether they have had any late or missed payments, annual revenue, business industry, how long they’ve been in business, and what the money will be used for.
Co-founders James Watson and Jonathan Raymond said better access to finance would support SMEs to invest in innovation and compete both on a local and global scale.
“Small businesses cite lack of access to funds as the number one barrier to innovation. This is no surprise given 44 per cent of small business loan applications are rejected. Also, with business lending remaining flat over the past year, it is a growing concern that SME lending is declining. In the face of this, we want to provide Australian businesses with valuable insight into their credit worthiness and give them the confidence to apply for the right loans,” said Watson.
“We found a major impediment to SMEs being able to access the right finance at the right rate is borrowers’ lack of knowledge about their business credit score. This can lead them to apply for loans which are unsuitable for their business and credit rating. As a consequence, some borrowers may have their applications declined by three or four lenders before securing finance,” he said.
Want more? Get our daily wrap delivered straight to your inbox!
Trending
Weekly business news and insights, delivered to your inbox.