OnDeck's head of sales on helping the 90% of businesses that don't know their credit score
OnDeck's head of sales on helping the 90% of businesses that don't know their credit score
Last year OnDeck conducted a study with our partner MYOB and found that over 90% of businesses did not know their credit score. This means that small businesses were essentially flying blind and not getting a true picture of the health of their organisation.
Awareness can be the first step towards changing behaviour, hence we worked hard to change these dynamics – by giving out over 3,200 business credit scores for free via our Know Your Score tool. However, it makes me wonder. While business owners are becoming more aware of their current financial situation, are their brokers taking the time to check their client’s credit score?
The Equifax business credit score ranges from 1 to 1,200 and is calculated using the information on the business credit file. This score aims to help SMEs (and their brokers) to fully understand the financial ‘DNA’ so that they can make an informed decision about their financing options and determine whether they will receive favourable terms from financiers and suppliers.
Having said that, different financiers have different thresholds based on their risk appetite and how the loan is secured (OnDeck’s minimum is 550).
One of the biggest trends we are observing in the mortgage broking industry is an uptick in brokers writing commercial loans for SME customers. In fact, over 70 to 80% of small businesses use an intermediary or an adviser to access finance and are looking to them as trusted consultants. Thus, educating the third-party channel on how they can make the most of their current data is paramount.
Brokers want information and insights that will create awareness of opportunity for their business and help identify / build differentiated offerings. Therefore, brokers need to sit down with their SME lender who can actually run them through data (collated by industry, geography etc.) and point them to the direction of sectors / markets where there are growth opportunities.
From the broker’s perspective, they are able to position their business so that they can grow and align themselves with industries that are growing. By understanding that, they can also support the commercial needs of their existing customers – just through some effective marketing into those data sets. By having insights around what is happening in the market, brokers can position their marketing assets in the channels that will help their business grow.
Lastly, brokers can also view how their client’s business credit score trends over time and provide credit support/business building tips to help improve their score as a best practice approach.
Therefore, credit data is a very powerful tool for a broker to make decisions – as much as it is for the lender or the customer.
Michael Burke is head of sales at OnDeck Australia, a high-speed business lender which works with brokers. Businesses can check their credit score through OnDeck's website.
Last year OnDeck conducted a study with our partner MYOB and found that over 90% of businesses did not know their credit score. This means that small businesses were essentially flying blind and not getting a true picture of the health of their organisation.
Awareness can be the first step towards changing behaviour, hence we worked hard to change these dynamics – by giving out over 3,200 business credit scores for free via our Know Your Score tool. However, it makes me wonder. While business owners are becoming more aware of their current financial situation, are their brokers taking the time to check their client’s credit score?
The Equifax business credit score ranges from 1 to 1,200 and is calculated using the information on the business credit file. This score aims to help SMEs (and their brokers) to fully understand the financial ‘DNA’ so that they can make an informed decision about their financing options and determine whether they will receive favourable terms from financiers and suppliers.
Having said that, different financiers have different thresholds based on their risk appetite and how the loan is secured (OnDeck’s minimum is 550).
One of the biggest trends we are observing in the mortgage broking industry is an uptick in brokers writing commercial loans for SME customers. In fact, over 70 to 80% of small businesses use an intermediary or an adviser to access finance and are looking to them as trusted consultants. Thus, educating the third-party channel on how they can make the most of their current data is paramount.
Brokers want information and insights that will create awareness of opportunity for their business and help identify / build differentiated offerings. Therefore, brokers need to sit down with their SME lender who can actually run them through data (collated by industry, geography etc.) and point them to the direction of sectors / markets where there are growth opportunities.
From the broker’s perspective, they are able to position their business so that they can grow and align themselves with industries that are growing. By understanding that, they can also support the commercial needs of their existing customers – just through some effective marketing into those data sets. By having insights around what is happening in the market, brokers can position their marketing assets in the channels that will help their business grow.
Lastly, brokers can also view how their client’s business credit score trends over time and provide credit support/business building tips to help improve their score as a best practice approach.
Therefore, credit data is a very powerful tool for a broker to make decisions – as much as it is for the lender or the customer.
Michael Burke is head of sales at OnDeck Australia, a high-speed business lender which works with brokers. Businesses can check their credit score through OnDeck's website. 
