SME fintech lender OnDeck has helped 16,000 small businesses to access a free credit score and gauge how likely they are to get the loan that they want.
Their Know Your Score calculator was created in partnership with credit bureau Equifax and can help SMEs to know more about how their business will be seen by lenders, as well as helping commercial brokers to assess the kind of credit that they should offer to their clients.
“Everyone should know their credit score, whether consumers or SMEs,” said OnDeck CEO Cameron Poolman. “It so important for their ability to access finance.”
“Almost every finance company will use some sort of credit score to ascertain whether they’re going to lend money, and often the informs that price that it will be as they used risk based pricing.”
“If we compared to the US, they use a score called FICO Score, and your average consumer would know that, and would put considerable effort into improving it, because they know that it does help them.”
“Australians are lagging behind: there was a lot of free consumer scores in the market, and we saw that there wasn’t a score available for SMEs to access for free to see what they had.”
“It’s essentially a whole lot of data pulled together that tries to predict the health of a business, or their propensity to pay back a loan.”
“We thought it was important to provide that as a free service so that SMEs can learn. They can learn if they have a good, average or poor score, and then what it all means.”
OnDeck also have their flagship system, KOALA score, which helps them to rapidly assess potential borrowers and offer loans within two hours.
“The KOALA score is a credit score, but it’s more detailed and slightly different,” explained Poolman. “To get it, we’ve actually access your data to determine it. But Know Your Score is pretty good indicator to show SMEs how they are going, but the KOALA score has a little more detail in it, with things like cash flow that we access from bank statements to show serviceability.”
