That’s the message from KPMG’s Leanne Hegarty, in response to research which found 93 per cent of small business owners had never checked their business credit score.
MYOB and the online small business lender, OnDeck, conducted the research, which included a survey of 380 small-to-medium-sized business owners.
OnDeck Australia CEO Cameron Poolman said the credit score was an important indicator of a business’ health.
“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.
“A business credit score is used by lenders such as OnDeck, as part of our process for assessing loan applications.’’
Ms Hegarty, a KPMG Enterprise Unit Partner, said an owner’s inability to access financial resources could delay the growth of their business.
“If it is measured, it can be changed or influenced,” she said. “The business can strategise what it needs to do to improve its credit score and understand the implications of a suboptimal score on the overall business goals.”
However, Ms Hegarty wasn’t surprised by the survey results because a credit score was not something that affected the general operations of a business.
“Small and medium-sized enterprises are fully occupied satisfying their current compliance obligations and delivering on their business proposition,” she said.
“Often issues that don’t have an immediate impact are put on the back burner. It becomes an issue with immediate impact when they apply for finance and a financier levies a higher margin or declines their request.”
Sydney Hills Business Chamber Treasurer Stephen Waite said it was important for a business to know how “bankable” they were.
“To find out your credit score during the process of applying for credit/debt may be too late. If a business knows its credit score now, they can put processes in place in order to improve it if need be.”
OnDeck is giving away 10,000 credit scores through the Know Your Score website.
Mr Poolman encouraged all business owners to jump online and spend a minute or two checking their score. “It’s totally free and won’t impact on your credit rating.”
Mrs Hegarty said access to OnDeck’s free credit score online was a great start. “Start with the data and then seek advice to turn the data into information which can be acted upon.
“Understanding the health of the business and how to influence it is imperative. If your business is your livelihood, why wouldn’t you keep it as healthy as you can.”
How bankable is your business?
• 93 per cent of the 380 small-to-medium business owners surveyed have never checked their credit scores.
• Business credit scores are a key indicator used for assessing credit or loan applications.
• OnDeck is giving away 10,000 credit scores checks through the Know Your Score website
www.ondeck.com.au/knowyourscore
