Unlock Big Potential With Small Business Lending
Credit risk strategies that expand your view of risk and opportunity.
Small Businesses See Opportunity. Do You?
It’s safe to say that small business drives the U.S. economy. As of 2021, there were 32.5 million of them across the United States, comprising 99.9% of all U.S. businesses.1
That’s a significant growth opportunity for lenders, except for one small problem: Most small businesses don’t have a credit score.2 In fact, fewer than half of small firms obtained funds from a bank between 2016 and 2020.3 That makes it extremely difficult to confidently assess small business credit risk.
1 U.S. Small Business Administration, FAQs December 2021
2 The Ascent (Motley Fool), “Most Small Businesses Don't Have a Credit Score. Here's How to Get One for Free,” Updated July 21, 2021
3 U.S. Federal Reserve, Small Business Credit Survey; 2021 Report On Employer Firms
That’s a significant growth opportunity for lenders, except for one small problem: Most small businesses don’t have a credit score.2 In fact, fewer than half of small firms obtained funds from a bank between 2016 and 2020.3 That makes it extremely difficult to confidently assess small business credit risk.
1 U.S. Small Business Administration, FAQs December 2021
2 The Ascent (Motley Fool), “Most Small Businesses Don't Have a Credit Score. Here's How to Get One for Free,” Updated July 21, 2021
3 U.S. Federal Reserve, Small Business Credit Survey; 2021 Report On Employer Firms
On average it takes more than 4.5 years for a small
business to appear on the Small Business Financial
Exchange (SBFE)4
business to appear on the Small Business Financial
Exchange (SBFE)4
4 LexisNexis® Risk Solutions internal data based on review of when a small business appears on the SBFE
Traditional data sources may only consider a portion of the
business information that can be used to make informed
small business credit risk decisions
business information that can be used to make informed
small business credit risk decisions
How Can You Confidently Approve
More Small Businesses?
How Can You Gain Visibility Into the People Connected
to the Business?
62%
62% of all small business owners use
personal credit cards to start or operate
their business5
5 U.S. Federal Reserve, Small Business Credit Survey; 2021 Report On Employer Firms
Better Small Business Insights Open Growth Potential
See the possibilities by incorporating alternative business data into your small business credit risk assessment strategies to expand your
view of risk and opportunity.
view of risk and opportunity.
Confidently Approve More
Small Businesses
Leveraging alternative insights gives you an edge in the marketplace over competitors who don’t have visibility into a robust profile of small business applicants. Many thin/no-file small business owners lack the data to be included in traditional business credit scores and consequently are overlooked for credit products. This limits the growth of not only small businesses — but also the financial institutions that miss out on such a rich market segment.
Being able to approve more small businesses means you can scale your portfolio, while helping small businesses thrive.
Being able to approve more small businesses means you can scale your portfolio, while helping small businesses thrive.
Connect the Dots between a Business and its Authorized Representative
Linking data to a business is a more complex problem than for a consumer. LexisNexis® Risk Solutions has industry-leading linking technology that connects commercial payment history and alternative business data attributes on both the business and the business authorized representative.
In other words, our expansive data and sophisticated information analytics allow you to cut through the cloudiness of business credit risk management. Generate the needed insights to inform more profitable small business lending decisions.
Alternative data on the business and its authorized representative, pulled from multiple data sources, enables you to see key indicators of stability and growth potential — as well as signals of potential business risk.
In other words, our expansive data and sophisticated information analytics allow you to cut through the cloudiness of business credit risk management. Generate the needed insights to inform more profitable small business lending decisions.
Alternative data on the business and its authorized representative, pulled from multiple data sources, enables you to see key indicators of stability and growth potential — as well as signals of potential business risk.
Improve Small Business Credit Risk Assessment with LexisNexis® Risk Solutions
We offer a suite of solutions that expand your visibility into small business applicants across the spectrum — from the no-file to full file applicants. See financial profiles you never could before, and also gain additional insights on those customers you have assessed previously.
Sharpen business credit risk management by adding hundreds of new, model-ready commercial and associated-person(s) attributes to your assessment processes. These include firmographics as well as information specific to the business owners and authorized representatives. Generate scores and reports that increase confident decision making. Expand visibility even further with Small Business Financial Exchange (SBFE) versions of these solutions that include exponentially more attributes on SBFE commercial payment histories and data.
LexisNexis® Alternative Data is aggregated from more than 10,000 sources that include:
business registrations with state and local governments
points of contact
address details
assets
property ownership
firmographics
derogatory public records on bankruptcy, judgments, liens and more
Many of Our Solutions Also Include SBFE Data on Over 30 Million Small Businesses Going Back to 2001.
Tap Into the Advantage of Alternative Business Data
Go beyond the traditional business credit risk management tools and enhance your capabilities with our best-in-class offering.
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We believe in the power of data and analytics
to manage risk & uncover opportunity.
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