"People with credit scores as low as 535 can now secure funding, in part because lenders can access robust information about their credit history, industry, and even the economic status of the area in which they live." (Rohit Arora)
New York, NY (PRWEB) July 31, 2012
In an effort to help small business borrowers and lenders make quicker and better informed financing decisions, Biz2Credit has launched version 2 of its proprietary BizAnalyzer™ as a free app. BizAnalyzer uses information from credit rating agencies to provide a free financial check-up for small business owners and help financial underwriters reduce their risk.
BizAnalyzer streamlines the loan application process by enabling borrowers to easily access and review their credit scores. Now available as a downloadable app, the tool benchmarks the risk assessment of a small business owner against the lending criteria of more than 1,100 financial institutions and the risk profiles of industry peers. BizAnalyzer also provides advice for small business owners to help them increase their credit scores and improve the odds of securing funding.
Biz2Credit’s proprietary algorithm suggests the best loan options possible, based on small business owners' financial data including:
Description of business assets (Real Estate, Equipment, Inventory, Accounts Receivable)
Personal Credit Score (500 -- 850)
Age of Business (Year 1, 2, 3, etc.)
Loan Amount Sought
Business Legal Structure (Sole Proprietorship, Corporation, LLC, Partnership, Non Profit)
Residence Status (Own, Rent or Neither) and Home Value
Monthly Mortgage/Rent Payment and Average Monthly Expenses
Average Monthly Income
Using a weighted formula of recent underwriting trends, BizAnalyzer generates an overall score (on a scale of 1-100%) rating the level of risk that a business presents to a potential lender. The assessment is then broken out by the following sections, based on information provided by small business owners searching for capital: Personal Credit Score, Debt-to-Income Ratio, Time in Business, Industry Risk, and Corporate Risk.
"Increasingly, the power of data is impacting the small business lending marketplace by enabling lenders to make more detailed risk assessments of potential borrowers and develop products designed specifically to meet their needs," said Rohit Arora, CEO of Biz2Credit and a pioneer in the use of technology to secure start-up and expansion capital and the #1 online credit resource for small businesses.
Biz2Credit's access to Big Data has enabled lenders to:
•spread risk more widely across geography and industries;
•lower acquisition costs while expanding geographic footprints;
•reduce the need to open new bank branches;
•offer paperless loan applications, refine underwriting, and speed up the lending process;
•develop targeted financial products geared for startup businesses, which have experienced difficulty in securing capital from big banks; and
•significantly reduce the cost of capital, particularly from alternative lending sources.
“During the past few years, small companies -- particularly businesses that have been operating for less than two years -- have often been denied loans by traditional banks and encounter difficulty obtaining capital. For instance, because technology enables lenders to get more robust information about borrowers, they can offer products specifically targeted to the needs of start-ups,” said Arora, who co-founded Biz2Credit in 2007.
"People with credit scores as low as 535 can now secure funding, in part because lenders can access robust information about their credit history, industry, and even the economic status of the area in which they live," added Arora, one of the nation's leading experts on small business finance.
A frequently invited speaker at banking and technology conferences, Rohit Arora has briefed the President's Council of Economic Advisors and the Small Business Administration on the state of small business lending. He regularly shares information that Biz2Credit is able to pull from primary data, such as loan application documents, and credit ratings agencies such as Equifax and D&B. In fact, because its financial data is so detailed, Biz2Credit has helped lenders in its network streamline their processes and develop financial products especially for startups.
Since the credit crunch began in 2008, non-bank lenders have become increasingly important in small business finance because they can utilize financial data to make better informed credit decisions. These so-called "alternative lenders" approve more than 60 percent of funding requests, according to the most recent Biz2Credit Small Business Lending Index, a monthly report on small business loan approvals. Thus, advances in financial technology have made it easier for women- and minority-owned businesses and startups in economically disadvantaged areas to secure capital in the current tight credit market.
“Through the integration of financial data, Biz2Credit is helping institutions streamline the credit decision-making process while saving entrepreneurs time and frustration that they otherwise might encounter in seeking funding to start and expand their operations,” said Arora, who said his company can notify lenders when potential borrowers have reached time thresholds of 6-months or 1-year in business.
Founded in 2007, Biz2Credit is a leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complimentary business tools. The company matches borrowers to financial institutions based on business’ unique profile -- completed in less than four minutes -- in a safe, efficient, price-transparent environment. Biz2Credit’s network consists of 1.6 million users, 1,100+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers. Having secured $650 million in funding for thousands of companies throughout the U.S., Biz2Credit is widely recognized as the #1 credit resource for small businesses.