CreditSME Score for Lenders

The CreditSME Score is a valuable and insightful tool for lenders in their credit assessment and screening of SME borrowers. 

The CreditSME Score incorporates a wide range of data points that are the key drivers of the credit profile of an SME borrower.  The CreditSME Score is based on the operating and financial profile of a business and the industry that it operates in. The lender can then overlay this with the structure of a deal to include any assets from outside of the business that may be used to secure the facility in their determination of their loss given default calculation.

The CreditSME Score can be used in a range of processes typically carried out by a business lenders including the up-front screening and credit assessment of a new prospective client, the on-going credit review process of existing clients, or a one-off benchmarking/analysis process for a defined portfolio of clients.

Uses and Benefits of the CreditSME Score

Initial credit assessment

Used as both a screening tool and as an important tool in the formal credit assessment process.

Increase efficiency of credit assessment process through a fast tracked analysis and clear presentation of all relevant credit information on a new and prospective borrower

Improved portfolio outcomes through additional layer of analysis and identification of potential red flags for further internal analysis

Ultimately provides a tool for enhanced credit analysis of SME borrowers for a more streamlined credit decisioning process and improved portfolio outcomes 

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On-going credit reviews

CreditSME Scores can be updated periodically as part of an annual or on-going credit review cycle.

Improved efficiency in credit review process by allowing an increased focus on poorer performing credits (where scores have reduced) and a streamlined, low touch review of business that are performing in line or ahead of expectations (scores stable or increased). 

Better utilisation of internal resources

Improved customer experience

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Portfolio reviews / benchmarking

The CreditSME Score can be used on a discrete portfolio of clients that may be a portfolio from a certain industry, internal risk grading or other grouping of borrowers.

Provides an independent analysis of each businesses with a consistent methodology applied.

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How It Works

Depending on the volume of transactions, the CreditSME Score on a business can either be managed as a one-off request through this site (click here), through a tailored lender portal or via email as preferred by the lender partner. The process is largely the same across all delivery channels;

1. Lender submits information to CreditSME Score (primarily last 2 years' financials and a small number of questions based on the industry of the business)

2. CreditSME may request further information on the business

3. Report provided to the Lender that includes the CreditSME Score and other relevant credit information such as credit ratios and how the business has scored under different categories (financial, operational, corporate structure and industry factors) in determining the CreditSME Score.

4. Interval agreed for any periodic future CreditSME Score updates on that business

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Key Drivers of CreditSME Score

Financial metrics

Traditional credit metrics such as:

  • Interest cover
  • Asset Cover
  • Debt to earnings
  • Debt to equity

Also includes other financial metrics such as :

  • Operating margins
  • Return on assets

The exact metrics and ratios will vary based on industry.

Qualitative factors

A range of qualitative factors that are seen to be key drivers of a credit profile. These will vary by sector though will broadly include;

  • Revenue and earnings volatility
  • Time in business
  • Corporate and ownership structure
  • Competitive position in market
  • Product/service diversity
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Industry

The financial and operating metrics for a particular business will be assessed based on the industry in which it operates. As a result, an industry score is embedded into the final CreditSME Score of a particular business. 

Pricing

One-off CreditSME Score

$495 per business

Includes:

  • CreditSME Score
  • Summary of financials and credit ratios
  • Key strengths and risk areas identified
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Partners

Volume based pricing

Includes;

  • CreditSME Score
  • Summary of financials and credit ratios
  • Key strengths and risk areas identified
  • Can be tailored to fit internal credit models and scores
  • Specified users assigned to request reports
  • Point in time and/or continuous scoring available 
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Portfolios

Pricing based on project

Includes:

  • CreditSME Score
  • Summary of financials and credit ratios
  • Key strengths and risk areas identified
  • Businesses grouped by risk category
  • Businesses ranked by credit profile
  • Can be tailored to fit internal credit models and scores
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