Clarify Your View of Small Business Risk 

Capitalize on a massive lending opportunity

Understanding risk and opportunity within a small business requires a multi-dimensional view. That means moving beyond the business to the individuals most closely associated with it. 

In the post-pandemic economy, some businesses are displaying signs of caution while others appear to be experiencing troubling levels of credit stress. 

Lenders aiming to distinguish between these two groups are starting to examine other factors to determine the true risk profile of a business.

Key indicators of small business risk

• Derogatory events within a 2.5-year period
• Rate of delinquencies and charge offs
• Credit balances

Rising rates of delinquency and increasing charge offs are troubling trends. On the other hand, decreasing credit balances demonstrate that some businesses are remaining cautious, representing an opportunity for savvy lenders.

To acquire a clearer and more predictive understanding of future risk, lenders need to incorporate personal derogatory records for associated individuals (employees, leaders or investors most closely 
involved with the business) into their assessments.

Is your data performing for you? Can you differentiate caution from risk? What opportunities exist among 
companies from disadvantaged geographies?

LexisNexis® Risk Solutions can help you answer these questions, providing a competitive data advantage that can improve decisions and drive growth.

Want to learn more about small business credit risk?

Source: 
1. https://www.federalreserve.gov/data/sloos/sloos-202407.htm
2: U.S. Small Business Administration, FAQs December 2021.