Commercial finance automation software can provide brokers with the resources they need to pre-package their deals quickly, efficiently and accurately. Automation software and platforms work in a variety of ways to improve the entire business loan process for lenders and brokers alike, but they often deliver a significant impact on pre-packaging.

Automation simplifies and speeds up the pre-packaging process. When using commercial finance automation software like our own SalesTech, the platform will handle everything from data collection to compliance checks to even matching deals with relevant lenders.

An effective automation system can entirely change the way brokers do business. Even when you’re not at your desk, SalesTech can pre-package deals 24 hours a day, 7 days a week, even finalising your commercial finance deals while you sleep.

Not only are the deals packaged quickly and with only minor input from the broker, but an automation platform also improves the quality of the packaged deal. With an automated commercial loan process, you can perform quality assurance checks against your pre-defined criteria without the risk of human error. This means that when you match your deals with lenders, you’re guaranteed a highly accurate assessment of the applicant within minutes.

Along with business credit scoring, assessing Companies House data can also prove invaluable to the customer onboarding process for business operating in the B2B finance space. Companies House is a UK government body that holds detailed information about every limited company in the country, including data on a company’s incorporation date, key figures and any past CCJs or other legal injunctions.

With the information held by Companies House, you’ll be able to bolster your ability to effectively and accurately score a company’s creditworthiness. This allows you to further enhance your B2B credit assessments and work with even better customers. However, assessing Companies House data can be extremely time and resource intensive when performed manually, leading to you sifting through reams of Companies House information in order to make accurate assessments of your inbound leads.

As with automated B2B credit scoring software, businesses now also have access to Companies House automations. If you work with UK-based companies, integrating a Companies House automation application into your pre-qualification and lead scoring systems can be extremely beneficial, allowing you to equip your overall scoring process with a raft of extremely valuable data without having to lift a finger. For many businesses today, Companies House automation is an essential B2B credit solution, enhancing reports with far more accurate data that goes more in-depth into a company’s structure and legal history than credit reports alone are able to.

Risk-based decision engine software may be the answer for companies who struggle to accurately and efficiently assess the potential risks posed by incoming leads during their onboarding process. 

A decision engine allows users to input all of the necessary client information into a digital application that can then automate all or part of the decision making process. Depending on the specific criteria unique to each business, this could involve prioritising credit risks, market risks, legal risks or another type of risk. Whatever the case, bespoke decisioning software is fully adaptable and allows businesses to make immediate, accurate risk-based decisions in seconds.

So, what are the benefits of automated risk-based decisioning? 

Due diligence automation is the process by which aspects of your B2B due diligence processes, such as credit checks, financial stability assessments, bankruptcy and CCJ checks and more, are processed either in part or fully, by automated systems.

As discussed, due diligence can be very time-consuming and resource-intensive, so being able to automate the process allows you to reap huge benefits when it comes to actually spending time on growing your business.

Due diligence automation can take many forms, and when you utilise high-quality automation systems, platforms or decision engines, you are also able to customise the automation process to ensure your needs are met. Some examples of what due diligence automations can include are:

– Document analysis

– Risk assessments

– Data management

– Compliance checks

– Report generation

– Workflow optimisation

– Logic-based decisioning

Of course, this is not an exhaustive list and, depending on your own needs, custom due diligence automations may be a better option than an off-the-shelf solution.

As mentioned above, lead scoring can be an incredibly beneficial aspect of the client onboarding process. It allows you to understand who your leads are and whether they’ll be a good fit for your business as a long-term customer. When you perform high-quality lead scoring, the entire due diligence process is improved and you’ll have a far more accurate assessment of who your prospective clients are.

Lead scoring is important as it gives you the power to focus on growing your business while working with only the most suitable customers. You can efficiently remove any unsuitable prospects before beginning the more in-depth due diligence process; saving you time and money.

1. Gather Basic Information

The first step in assessing the creditworthiness of a company is to ensure that you have the very basic information about them available to you. Though very simple, the essential details of the business are essential to assessing creditworthiness. This includes: the registered name, physical address and legal structure (e.g. whether they are a limited company, an LLP, etc.)

This basic information can help you determine the legitimacy of the business and is a key aspect to complete before proceeding.

2. Assess Financial Health With Companies House Data

Once you have the basic information on the business whose creditworthiness you are checking, the next step is to use the data held by Companies House to accelerate the process. 

Companies House data will allow you to see director information, if there are any unpaid debts or CCJs against the company, whether the company is in administration and more general filing histories and financial statements that you can analyse later.

Some of the information available through Companies House can show you very serious red flags when it comes to creditworthiness assessments. CCJs in particular can indicate that the business has had serious financial issues and a history of non-compliance.

3. Run A Business Credit Check

Once the company has passed your Companies House checks, it’s time to run a business credit check on them. While Companies House offers a range of very beneficial public information, by running a business credit check against a company, your creditworthiness assessment will be even more accurate.

A business credit check from a trusted provider like Creditsafe is invaluable when assessing creditworthiness. A business credit check will give you even deeper insight into the financial stability of a business, showcasing a company’s in-depth credit history, as well as providing you with a credit score similar to that of a personal credit report.

Many credit report providers will also offer you a suggested credit limit for your business clients. This enhances your creditworthiness assessment even more, and ensures that you are undertaking more advanced due diligence.

4. Analyse Financial Statements

Once you have successfully run a credit check on a business, you can comfortably analyse their financial statements. With a business’ balance sheets, profit and loss statements, and cash flow statements you’ll have much deeper insight into their financial health.

Take financial ratios, liquidity and profitability into account and you should find it relatively straightforward to understand how the company manages debt. From there, you’ll be much closer to accurately determining their creditworthiness.

5. Verify Trade References

With all the information so far, you should have a solid grasp on the creditworthiness of the company you are assessing.

However, another very useful avenue to pursue as part of the process is verifying trader references. Contact the business’ suppliers and trade partners to request references regarding their own experiences with the company being assessed to accurately verify their experiences.

Verifying a business’ legitimacy and creditworthiness independently through people who have worked with the business gives you very reliable and accurate information into how reliable the company really is.

County court judgements (CCJs) can have significant implications for your due diligence process. A CCJ is a court order issued against businesses that have failed to repay a debt and, therefore, is a red flag for any business operating in the financial space. 

Knowing a company has a CCJ can highlight creditworthiness issues, indicate potential problems with supply chains and even suggest a history of legal non-compliance. For many businesses, working with organisations who have a CCJ could be very risky, and may be entirely out of the question. As such, it is incredibly important to know whether or not a company has any CCJs as part of the due diligence process.

Once again, Companies House data can be your key to understanding whether or not a company holds any county court judgements. With access to a company’s filing history and financial statements through Companies House, you’ll have a much deeper understanding of a company’s financial history, any outstanding debts they may hold and if a CCJ has ever been levied against them.

Combining Companies House data with a business credit report is an even more effective way to accurately judge a company’s financial status.

At the core, credit analysis is the process undertaken by lenders and other organisations to understand the creditworthiness of a potential borrower, client, customer or partner. With a company credit report, you’ll have a wide range of information that can be beneficial to helping you understand the creditworthiness of a business.

Of course, no two businesses are alike, so it’s important to be able to fully understand each prospective business that you’ll work with by utilising information from a wide range of data points.

Beyond a simple assessment of a credit report, your analysis may also incorporate data from Companies House to determine whether the business you’re analysing has any CCJs or has filed for bankruptcy in the past. For many lenders and brokers, this information is as essential as understanding the credit history of a business.

Collating, analysing and implementing this company data into your underwriting or pre-qualification is essential, but can be complex and time consuming. As every business is different, doing a detailed credit analysis of a company can be a daunting task and take up a lot of time and effort from your team.

Much like a personal credit score, a business credit score is determined by a number of factors. Unlike most personal credit scores that range from 0 to 999, the majority of business credit scores – including the score provided by our partners at Creditsafe – range from 0 to 100. As with a personal score, the higher the number the more stable, secure and, ultimately, creditworthy the business is.

The most basic features of a company credit score include the age of the credit history, the number of recent credit enquiries made by the company and the company’s payment history. These are the same factors that your personal score is likely made up of, but when it comes to business credit, there’s a lot of other factors you need to consider. It’s these additional factors that make reading and understanding business credit references so important for business finance professionals.

When you check a business’ credit report, you’ll not only be aware of the company’s financial health, but also information about the business such as the business’ name, incorporation date, trading address, SIC code and more.

The credit references you can check through business credit agencies also help you make the fundamental decisions around company credit limits. With the credit reports from Creditsafe, in particular, you will be provided with a recommended credit limit to act as a rough guideline on the maximum contract capacity on a single contract over a 12-month period. You might refer to this as trade credit, and with it you can give your customers the power to purchase goods and services without them having to apply for a traditional loan.