Research conducted by MYOB and OnDeck revealed that 93 per cent of the 380 small-to-medium businesses surveyed have never checked their business rating, which is not only “an important indicator of the health of their business”, but also a key indicator used in assessing credit or loan applications.
However, OnDeck Australia’s CEO, Cameron Poolman, said that he was not surprised to learn that the majority of businesses had not checked their score.
“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 cash flow,” he said.
In order to raise awareness of the concept among small businesses, Mr Poolman said OnDeck will be giving away 10,000 free credit scores through the Know Your Score website.
“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,” Mr Poolman said.
Mr Poolman added that since launching Know Your Score, around 86 per cent of businesses who have used the tool have received a good or excellent score.
The service has already been trialled by small businesses, with Alison Dean, owner of afternoon party business The High Tea Party, saying that she had used the free service on her mobile phone.
Although she said that she got a positive credit score, she added that she “didn’t know” if she would apply for a loan yet, but “liked having the option in [her] back pocket”.
“As they say, knowledge is power,” said Ms Dean.
As well as providing free credit scored for SMEs, OnDeck has also recently partnered with finder.com.au to help consumers access their credit score, following research that found nearly 25 per cent of Australians feared their credit score could prevent them from getting a loan or credit card.
If you’re feeling overworked and overwhelmed in this fast-paced mortgage market, it’s time to make some changes, and the Business Accelerator Program can help! Early bird tickets are on sale now. Work smarter, not harder, this year.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.