CreditSME Score - Overview
The CreditSME Score is a proprietary system that is solely focused on scoring the credit profile of a SME. The CreditSME Score factors in a large number of qualitative and quantitative factors of a SME that can broadly be categorised into the following segments:
Financial - traditional credit metrics analysis including leverage, debt service, interest cover, and asset cover
Qualitative - assessment of various qualitative factors specific to the credit profile of a business including operating history, industry position and management capabilities
Corporate structure - factors in the structure of the company, director profiles and other aspects that are relevant to the credit profile of a business
Industry factors - incorporate various industry factors and how this may impact on a business credit profile
The CreditSME Score is typically on a scale of 1 to 100 though can be tailored to align with a client's existing internal ratings scale. The CreditSME Score can be on a point in time basis or monitored on an on-going basis and rescored at certain intervals.
The CreditSME Score is a useful tool for lenders in both their up-front credit assessment of a prospective borrower and as part of the on-going credit review process.
The CreditSME Score is also a useful tool for businesses that are seeking finance from a lender or take on counterparty, operational or reputation risk in their ordinary course of business such as extending credit terms to customers or appointing sub-contractors on projects.