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Information solutions company Experian has launched a unique Business Owners Report service to predict the likelihood of business failure amongst non-limited businesses.
With more than two million actively trading non-limited businesses in the UK today, Experian’s Business Owners Report will enable organisations to accurately assess the risk of trading with non-limited businesses before extending credit, goods or services.
The company is able to combine both business and consumer information in business reports and commercial credit scoring to enhance predictiveness, whilst ensuring all data use is fully compliant.
But the real benefit of the Business Owners Report is the ability to assess the behaviour of the individual proprietors when information on the non-limited business is unavailable, in order to assess whether they have the capability to run the business successfully and, therefore, to make accurate decisions about trading with it.
The Business Owners Report will enable the credit granter to credit check the business by assessing information on the person behind the business – the business owner or proprietor.
It provides an aggregated view of up to three proprietors of a single business at any one time and an indication on the likelihood of future business failure, including an easy-to-understand and use credit summary that indicates, for example, whether the business is very high risk or low risk.
Richard Lloyd, Managing Director of Experian’s Business Information division, explained: “The Business Owners Report is fundamentally different to any other non-limited business report or consumer credit report, it will encourage business growth and lead to a greater reduction in risk and bad debt.
"Currently, when a non-limited business applies for credit, because the business is new or there is a lack of information, it is often unable to get a credit rating and, as a result, will be unable to obtain credit.
"To aid business and entrepreneurial growth and to protect those trading with these businesses from the risk of bad debt, Experian’s
Business Owners Report enables the non-limited sector to obtain much-needed
credit to fund their growth and the credit provider to get a proper indication
of the creditworthiness of the business.
“Up to three proprietors can be included in the one Business Owners Report
making the service very cost effective, especially when you consider the risk of
not taking out an adequate check before supplying credit, goods or services.
“The value of consumer data to predict creditworthiness and likely business
failure can never be underestimated. When you consider that the owners of
non-limited businesses are personally responsible for any debts run up by their
business, the business owner or proprietor is the business.
"As a result, consumer information is a very powerful indicator of future
activity and provides a more predictive view of a non-limited business’
creditworthiness and risk, helping them to obtain a credit rating and enable
other organisations to make important lending, financing and marketing decisions
with regards to these small businesses."
The reports are unique in that they provide a statistically calculated credit
score for a non-limited business, based upon the proprietors or business owner’s
consumer information in a commercial context.
The new reports' score utilises Commercial Delphi, the most predictive
commercial credit score on the market and takes into account information such as
whether the business owner has been involved as a director of a company that has
failed or has personally incurred county court judgments, defaults or
bankruptcy.
Source:
RedAlert
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