Small businesses in Australia lack insight into their business credit score, says SME Credit Score, and that means businesses aren’t applying for the right kinds of loans. The firm revealed on Tuesday (April 12) a tool to help enlighten small business borrowers of their credit positions, an effort aimed at boosting the chances for SMEs to get approved for financing.
The company launched a way for small business loan applicants to access their business credit score on the site. That score then matches them to a lender more likely to approve them for financing.
“Small businesses cite lack of access to funds as the number one barrier to innovation — no surprise, given 44 percent of small business loan applications are rejected,” said SME Credit Score Cofounder James Watson in a statement. “Also, with business lending remaining flat over the past year, it is a growing concern that SME lending is declining.”
It’s in this condition, the executive added, that SME Credit Score launched the new credit scoring tool for SME clients.
“We found a major impediment to SMEs being able to access the right finance at the right rate is borrowers’ lack of knowledge about their business credit score,” Watson continued. “This can lead them to apply for loans which are unsuitable for their business and credit rating.”
This means SMEs are getting rejected by several lenders before they secure finance, he added, making for a time-wasting, inefficient loan process.
According to SME Credit Score, the portal can connect to about 60 lenders, both banks and alternative financers, including Prospa and Scottish Pacific.