A Virtual View Into Small Business Credit Health

Small business owners may be making some mistakes when it comes to their company’s credit health. Often, they may not even be aware of it. A new tool from Biz2Credit is looking to help SME owners assess the credit performance of their businesses and more easily identify the business practices that can impact their credit.

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Biz2Credit said Tuesday (Dec. 15) that it is an industry-first to release the BizAnalyzer Score Simulator Tool, an online tool that provides small businesses with a virtual assessment of their credit. According to the company, the solution is a “virtual CFO” to monitor cash flow, revenue, credit scores and other financial statistics that are taken into account by lenders when assessing the creditworthiness of a business.

“The goal of the simulator is to help small business owners make better, more strategic financial decisions,” the company said in its announcement.

Biz2Credit pointed to ways a small business owner may be negatively impacting the credit health of their companies, whether it be bounced checks, bank account balance fluctuations, withdrawal habits, tax payment default and other decisions and behaviors.

In a statement, Biz2Credit Chief Executive Officer Rohit Arora said the tool aims to help small business owners understand what impacts their credit health and how.

“This virtual CFO resource gives them a complete view of exactly what lenders examine when they underwrite small business loans,” Arora said.

The Score Simulator is Biz2Credit’s latest effort in helping small businesses orient their credit performance ahead of a loan application.

The small business lending industry has taken new approaches in recent years to mitigating borrower risk; some companies have begun aggregating and analyzing information about a borrower other than just a credit score to underwrite loans. Some finance players have even started using social media and Web browser history to assess creditworthiness.