SMEs are often at a disadvantage in relation to financing. They don't possess the resources available to larger companies, having limited assistance information to help them grow their business. Usage of financing is more than required for most SMEs - due to the intense competitiveness today, it means survival.

business loan

A bank such as a bank, alternatively, needs to form a strategic knowledge of each SME-borrower in order to accurately rate the business’ creditworthiness. Thorough assessments include adequate info on past projects, future plans, management quality, financial performance, and industry outlook. Such assessments go beyond credit scoring, this process assigns actual qualitative valuation to a company and as such gains the label Credit Risk Rating.

Credit rating

Traditionally, lenders never let business owners know how they rated beyond an extremely brief “approved” or “denied” application for the loan result. In reality, understanding of its business credit risk rating can be of significant benefit to the SME company owner. He learns what creditworthiness is about in the context of his own business which is given the opportunity to translate this knowledge into managing his business accordingly.

Today, the credit rating process is enabled by i . t such as the Software-as-a-Service CreditBPO Rating Report©*. Generated in 24-48 hours are the credit risk rating and actionable recommendations that collectively consitute a guide the SME can follow toward improving its creditworthiness. This online rating solution benefits both banks and SMEs in various ways, not least being bridging the credit information gap which includes kept lending to SMEs in a lamentable level for decades. (Businessworld: “Disruptive innovations that help small firms get loans”)

Technology now more than ever before is a great enabler. It has allowed startups and SMEs to carve out thriving markets of what was once the exclusive domains of large enterprises. That said, SMEs must embrace innovation and optimized management whenever they hope to compete in any way. At the same time, banks/ lenders cannot keep loan applicants wait weeks for a credit decision or they risk hurting their bank’s brand name eroding customer goodwill.

SME bank loan

Finally, the opportunity for jumpstarting SME development into national sustainable growth are at hand and government will be the likely catalyst correctly. Technology must be used just as one integral part of government intervention programs to garner interest, optimize results and spread benefits. An instrumental possibility such an endeavor would be a goal and transparent IT-enabled credit score platform, ideal for evaluating vendors, suppliers, and bidders. The spread of such a platform would quickly gain steam as support is gathered through the entire country in pursuit of an extremely competitive nation-contributor to the integrated ASEAN region.

To be able to network both domestic and international businesses requires mutual understanding in business. As such, being able to describe the valuation of companies in the common language thanks to CreditBPO Rating Reports would be both catalytic and instrumental.

*The CreditBPO Rating Report is copyright-registered with all the U.S. Copyright Office.
“Technology Company in the Year” finalist, Asia CEO Awards 2015.