What is SBFE and How is it Relevant to Small Business Owners?

Published: April 22, 2024 by Gary Stockton

SBFE: The Small Business Financial Exchange and your business credit.

If you’re a small business owner, understanding SBFE—Small Business Financial Exchange—is essential. But what exactly is SBFE, and how does it affect your business? This article helps to answer those questions.

What is SBFE?

The Small Business Financial Exchange (SBFE) is a reputable business data exchange that collects payment data from commercial lenders (including banks, credit card companies, and alternative lenders), and is known as a data exchange. “SBFE is the largest repository of small business credit payment performance data, which includes the top 10 commercial banks and card issuers, which contribute data to SBFE and represent over 98 million lender accounts covering commercial term-loans, lines of credit, and credit cards,” said Greg Carmean, Director of Product Management at Experian. “SBFE Data is used by many lenders to evaluate small business credit risk. While not all lenders contribute their payment performance data to SBFE, those that do play an integral part in helping small businesses secure the credit they deserve.”

This data is NOT publicly available. Experian is one of the four authorized commercial credit reporting agencies, known as Certified Vendors by SBFE, who currently license this data to create credit scores and business credit reports for small businesses.

Who runs SBFE?

SBFE is governed by a board of directors made up of representatives from some of its member organizations and is run independently from credit reporting agencies. SBFE operates with full-time staff and flourishes with the support of their Board of Directors, Member organizations, and industry experts on their committees and task forces.

Why does SBFE exist?

The data collected by SBFE provides a more accurate and complete picture of a small business’s creditworthiness, which can help lenders make better lending decisions and offer more competitive rates to qualified businesses.

Who reports data to SBFE?

SBFE’s members contribute their payment performance data directly to SBFE. These members are typically lenders and merchant acquirers who contribute information about their small business borrowers and customers. This data includes loan and credit card payment history, along with other relevant financial data.

Small businesses cannot directly report anything to SBFE. The companies that lend money or extend credit to small businesses will report data to SBFE (if they are members of SBFE). Not all commercial lenders are members of SBFE. Then your payment history and information is available in your business credit report, and reflected in your business credit score. You can check your business credit report and score at any time.

So if you are a business owner, and you have any kind of credit—from a business credit card to an SBA loan—your lenders may report your payment data through SBFE, which is part of what determines your business credit score and makes up your business credit report.

Small businesses don’t have direct access to SBFE. Rather, your access to view your information or dispute inaccuracies is through a business credit report like those offered by Experian (link to business score page). Take control by making payments on time, and fulfill any financial obligations you have with your creditors and lenders, whether they report directly to Experian or to SBFE. You can stay informed about your business credit by requesting and monitoring your business credit report from Experian and making sure it’s correct. If there are any inaccuracies on your credit report, do not contact SBFE – please contact Experian or your lenders instead.

Why should a small business owner care about SBFE?

Although small businesses don’t interact directly with SBFE, it’s still an entity you should be familiar with. Here are a few reasons:

  • Improved Credit Picture – SBFE data creates a more complete picture of your small business’s creditworthiness, which can help lenders make more informed decisions, which could include better loan terms and approval rates for businesses with good payment histories. By using SBFE data in conjunction with bureau data, lenders might go beyond traditional credit scores and consider alternative data points, which can be beneficial for newer businesses or those with limited credit history. Businesses can dispute inaccuracies in their credit reports through the authorized credit reporting agencies, such as Experian.
  • Better Products and Services – Information sharing and collaboration among SBFE members can lead to the development of new lending products and services tailored to the needs of small businesses.

What is Experian’s Role in SBFE?

“As a Certified Vendor of SBFE, Experian utilizes SBFE’s Data representing tens of millions of small business accounts, dating back decades, to create specialized products and services for SBFE members,” said Dirk Yoo, Director of Product Marketing at Experian. “Certified Vendors must comply with a stringent certification process and ongoing oversight to receive and maintain this designation. Among the SBFE data-driven products and services that Experian has developed are highly predictive machine learned financial risk scores, trended attributes, and consumer-to-business linkage.”

Stay In Control of Your Credit by Staying Informed

By building and maintaining a positive payment history with your lenders and educating yourself on your business credit profile, you can leverage your business credit to your advantage. Remember, responsible financial management paves the way for fairer credit assessments, better loan options, and ultimately, the growth and success of your business. Take control of your financial future – stay informed, be proactive, and keep building your business credit.

Ready to assess your business credit? Check your business credit report today and take control of your financial future!

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