The amount of information available on small businesses throughout the US has always been a challenge for B2B lenders despite the revenue opportunity they provide. Matter of fact, 99% of the 28M businesses in the US are private and more than 27M have less than 100 employees. While this makes an infinite opportunity for small businesses to grow, securing funding and loans can be difficult. The gap of information, including financial health of these businesses, put financial institutions at significant risk. Further exasperated by fact 3,000 companies will close their doors each business day. Cortera continues to support the notion that organizations need broader, more predictive information about the risk associated with customers, especially the private ones, in order to protect their bottom time.
Cortera recently announced a partnership with Moody’s Analytics. The partnership will strengthen Moody’s Analytics’ risk scoring solution, known as RiskCalc, for small business lenders by fueling the system with unique trade credit information. The RiskCalc Small Business solution enables commercial lenders and credit analysts to assess the credit risk of smaller, private companies. The tool optimizes a combination of firmographics, financials and trade loan payment behaviors. Rather than focusing solely on payments, which most traditional B2B reporting agencies do, the Moody’s and Cortera partnership creates a unique blend of information to model a derivative, predictive scoring system. The solution helps lenders more accurately determine the credit worthiness of businesses that traditionally have been difficult to assess.
By incorporating Cortera’s unique, industry-specific purchase behavior data, companies can identify early indicators of future growth and risk. This proactive approach is essential in order to navigate today’s dynamic small business market, giving small businesses the opportunity to expand and giving lenders confidence in their decision to extend credit.
Moody’s Analytics held its annual Commercial & Ag Lending Conference – Calc2018 – Monday, September 24 – Wednesday, September 26, 2018. Cortera CEO Jim Swift participated in a panel discussion on how Cortera’s analytics will power such a vital tool for lending institutions.