A better way to evaluate small business credit risk

Document: Published Sep 29, 2016

If a new company has not yet established a credit history, many lenders turn to the business owner’s personal credit to evaluate risk. But does personal credit alone paint an accurate picture of a new business’s risk? Is there a more optimal way to determine how creditworthy a young company may be?

To find answers, Experian® randomly selected the credit files of 2.5 million U.S. small-business owners and compared them with the records of 1 million consumers. We then looked at the credit history of both groups, as well as key demographic data such as age, education and income. We also reviewed the number of open trades, delinquencies, bankruptcies and business survival rates. The results of this research are explained in this whitepaper.

Related Resources

  • Whitepaper: Is student loan debt making it harder to start new small businesses?
    Document Published Date: Published Mar 26, 2018

    Student loan debt has been increasing year-over-year since the 1990s. Experian Commercial Data Sciences is monitoring the effect student loans have on small-business creation and survival. This paper examines whether or not student debt is hampering the ability to open new businesses and keep them open

  • Managing volatility: the unique credit risks of the mining industry
    Document Published Date: Published Jan 3, 2018

    In response to increasing interest in the mining industry, Experian® completed a review of the coal, natural gas and oil/petroleum industries, along with their impact on small businesses. Depending on the region of the United States, fossil fuel mining is both increasing and decreasing. With the current changes in these industries, the impact on other industries ranges from an increase in new small businesses to an increase in delinquencies. To understand the nuances of the fossil fuel industry, Experian® conducted a further study on Kentucky, West Virginia and North Dakota was done to analyze the impact that industry changes have on the economy of individual states.

  • Webinar: The face of small business - how business owners and consumers compare
    Video Uploaded Date: Published Oct 10, 2016

    Experian Business Information Services did a data study of 2.5 million small business owner profiles and analyzed the data, comparing small business owners with average consumers. In this webinar Peter Bolin, Director of Consulting & Analytics for Experian shares the results of this research.

  • The Face of Small Business Infographic
    Document Published Date: Published Sep 16, 2016

    Experian Business Information Services recently concluded a data study to compare the credit profiles of small business owners compared to average consumers. Our Infographic offers some of our key findings.

Experian and the Experian marks used herein are service marks or registered trademarks of Experian Informations Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.