Once a business owner knows about their credit score they have a much clearer picture of the financing options available to them.
About 93% of small business-owners have never checked their business credit score, according to research by MYOB and OnDeck.
The survey of 380 SME owners for the MYOB SME Snapshot highlights a major blind spot for business owners, said OnDeck, which recently launched a free online tool to address this gap.
“Every business has a credit score, even if they don’t realise it, and it’s an important indicator of the health of their business,” said Mr Cameron Poolman, CEO of OnDeck Australia.
“Knowing their score means that business owners are in a much better position to look at funding options for activities such as growing the business, hiring staff, buying stock or smoothing out cashflow,” Poolman said.
Poolman said OnDeck is giving away 10,000 free credit scores through the Know Your Score website, which is 100% online and free, in order to raise awareness of the concept among small businesses.
“A business credit score is used by lenders such as OnDeck, as part of our process for assessing loan applications. Once a business owner knows this information, they have a much clearer picture of the financing options available to them. And in fact, since launching Know Your Score, around 86% of businesses who have used the tool have received a good or excellent score,” Poolman said.
Poolman said he was not surprised that the vast majority of businesses have not checked their credit score.
“OnDeck has talked to thousands of small business owners since we launched in Australia this year, and we know that they are often in the dark about their credit score and their loan options. In fact, many of them are pleasantly surprised to find they have an alternative to applying to a bank for a loan, and one that doesn’t require them to put up their house or other assets as collateral,” the CEO said.
“They are happy to find out that there’s a company out there that actually wants to lend to small business,” he said.
The business credit score is a key indicator used for assessing credit or loan applications, and OnDeck uses it as one data point when businesses apply for unsecured loans of between $10,000 and $150,000.
“OnDeck uses technology to assess loan applications in as little as one day; so getting a business loan is actually much easier and more accessible than many people assume. Knowing your score is a great starting point when thinking about accessing funding, and it’s an important indicator when OnDeck makes lending decisions,” Poolman said.
“We encourage every business owner to jump online and spend a minute or two checking their credit score. It’s totally free and won’t impact your credit rating, so it’s definitely worth doing,” Poolman said.
Inside Small Business
