It was hardly possible to go a day over the past few months without hearing about the squabbles in Washington D.C. regarding the debt ceiling and the budget deficit.  Thankfully the issues have been resolved, albeit temporarily.  I thought I would take a moment to draw the corollaries that this debate has with the small business owner’s daily business management activities.

When the U.S. government needs money to cover its expenses, it can go to the open market and sell debt instruments (mostly notes and bonds) to individuals, organizations and foreign governments.  The U.S. has a very strong credit rating, which allows the government to sell these notes and bonds at a relatively low interest rate (compared to other governments and corporations).   This low interest rate makes the activity of selling debt, also known as borrowing money, lower cost to the tax payer—who is ultimately responsible for paying off these federal debts.

At the core of the D.C. debate was whether the government should allow itself to borrow more money to cover its deficits.   One of the direct impacts of this decision is whether the U.S. will continue to be rated well by the credit rating organizations.  A drop in this credit rating means that the government will have to pay higher interest rates to the people, companies and foreign governments that want to lend money to the U.S.  These higher interest rates become a bigger burden on the U.S. tax payer.

This is not that dissimilar to the daily activities of a small business owner, who must manage their cash flow to cover all of their costs.  Paying bills on time impacts their business’s credit rating in virtually the same way that the U.S. government’s actions impact its credit rating.

The credit rating for the U.S. government’s debt is issued by the credit rating agencies such as Moody’s, S&P and Fitch.  The credit ratings for businesses are issued by organizations like Experian.  Just as the Washington debate could have had cost implications to the U.S. borrowing program, the payment activities of small business owners can directly impact their access to affordable financing for their business.  Companies with high credit scores generally receive more favorable financing terms than those with lower credit scores.   These favorable financing terms result in lower borrowing costs to the business, leaving more profit for the business owner.

To learn more about commercial credit risk, please visit www.businesscreditfacts.com

Macro-economic information can often be one of the most important sources of data when setting a company’s strategies. Yet, this data is not always timely or that accessible. Whether you are reviewing the optimal staffing level for your firm in the coming year, or determining how much inventory to purchase, it is essential to understand what is happening at the core of the economic environment. Below are a few sources of valuable information that can help provide a glimpse into the current state of the businesses in the U.S.

1)      The U.S. Department of Labor’s Bureau of Labor Statistics provides interesting information on inflation, unemployment, pay & benefits and productivity among other key data.

2)      The U.S. Small Business Administration is a valuable resource to small business owners.  The site provides access to tools, resources and training aimed to help small business owners.  The site also provides research and reports that can have valuable pieces of economic information.

3)      The Federal Reserve Board has numerous areas of financial information.  The Fed publishes many statistical reports on the banking industry, but they also cover inflation, consumer finance information, home mortgage trends and the impact on home prices.  These reports often provide visibility into the macro-economic forces that are driving the economy. 

4)      Experian’s quarterly Business Benchmark Report provides a quarterly view into the financial position, risk, and payment behaviors of the 25 million+ businesses in the U.S.

Utilizing these tools can help you evaluate your strategic direction in the coming months. If there are any other interesting sites you’d like to share, please feel free to comment with additional resources you find helpful.

Today, Experian debuted DecisionIQ Premier at FinovateSpring in San Francisco.  In front of an audience of more than 750 financial services industry leaders we discussed the features and benefits of our new service.  Our newest offering is available on BusinessIQ.  BusinessIQ was designed and built to provide an easy to use single platform that delivers all of the data, analytics, and tools that a commercial credit professional needs.  Whether users need credit reports, scores, alerts, portfolio management tools, collections management tools, or decisioning support, BusinessIQ covers all of their needs.

Allen Anderson, president of Experian’s Business Information Services, presented DecisionIQ Premier.  He highlighted how this new service extends the functionality of BusinessIQ, to include configurable credit application building tools and commercial credit decisioning capabilities.  DecisionIQ is a simple to use tool that delivers consistency in the credit decisioning process, and helps our clients manage their commercial credit risk, and grow their business more profitably.

We had a great experience at Finovate. The event proved to be a great opportunity to showcase our latest innovation to an audience of industry luminaries and technology leaders.  We received excellent feedback from the attendees and our fellow presenters.  For more information on BusinessIQ or DecisionIQ Premier, please go to www.experian.com/b2b.

Today, I am at the FinovateSpring conference at the Concourse Exhibition Center in San Francisco.  Finovate is the first “all demo focused” conference that highlights cutting edge technologies and innovative advancements in the consumer and commercial financial services space.  After a rigorous application and selection process, Experian’s Business Information Services was selected as one of 64 companies to present our latest innovation.  Tomorrow morning we will debut our new DecisionIQ Premier offering on stage.

Along with the presenting companies at the conference, there are a number of analysts, journalists, and financial services companies that attend to stay on top of the latest advancements in this area.  The Finovate team tells me that this year’s spring conference sets a record for attendance with more than 750 people registered.

The companies that are scheduled to present over the two-day event span the gamut, from new upstart firms, to established service providers like Experian.  Throughout the day, I sat through a number of the presentations and saw some very interesting new technologies.  We are looking forward to our presentation on stage. Check in tomorrow for more details about DecisionIQ Premier.