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SMEs want fast access to credit

When EY asked small businesses about the bank loans they secured in the COVID-19 crisis, 48% said they wanted quicker access, and more than half expected to be funded within seven days.

But for lenders, it can often be difficult, if not impossible, to give them what they want:

  • Manually gathering information from businesses to verify identity and confirm bank details is time-consuming
  • There’s also friction in requesting customers’ financial accounts and bank statements. Applicants expect slick customer journeys as much as fast decisions.
  • Even when armed with the evidence, lenders may still require a lengthy underwriting process to judge applicant viability.
  • High-value time spent on underwriting can quickly eat into profit margins, making the loan unviable and taking up time better spent assessing higher-value applications.
  • The result? It takes up to two weeks for SME loans to be issued.

This is why we are excited about Experian’s Commercial Acumen tool, which makes faster and more reliable SME lending decisions a reality.

The benefits of fast decisions – for SMEs and lenders

By making fast and accurate decisions on SME loans, lenders can help more small businesses and open up some fantastic opportunities:

  1. It’s what SMEs want: With small businesses calling for quicker turnaround, lenders can win market share by offering faster loan decisions with less friction.
  2. Unshackles underwriters: Digitally gathering and analysing SME bank account data slashes underwriting time and cost for lenders – making loans more profitable.
  3. A higher standard: Automatically categorising transactional data provides deeper insight for consideration in decisioning systems and allows valuable new metrics for assessing credit risk to be introduced at scale.

What is Commercial Acumen, and how does it work?

Experian Commercial Acumen makes it quicker, easier and more cost effective to lend to small businesses. It helps banks, brokers and other lenders serve a fast growing and complex market without increasing risk.

With applicant consent, lenders get access to three years worth of transactional data. This data is automatically analysed and categorised into a carefully selected range of metrics.

Categories include wages and net profit, as well as any gambling transactions and the number of times an account has entered its overdraft – giving lenders a comprehensive snapshot of how the business operates day-to-day.

Commercial Acumen slashes application processing time by up to 90% by automating the collection and analysis of bank transaction data. For SMEs, this can mean funds could be released in a matter of days or even hours.

Faster decisions with transactional categorisation is good news for everyone.

It benefits the SME economy, the 99% of UK businesses that collectively deliver £2.3 trillion of turnover each year, by getting money into their accounts quicker.

And it benefits lenders, who can make faster decisions with greater confidence and expand the viable volume of small businesses that they can lend to profitably.