ATLANTA, Nov. 6, 2019 /PRNewswire/ -- LexisNexis® Risk
Solutions today released the results of its 2019 Small and
Mid-Sized Business (SMB) Financial Inclusion Report, which measures
the degree SMBs experience challenges when seeking financial
support from banks and lenders. Based on a survey of 305 owners and
authorized agents of SMBs (businesses with up to $20 million in annual revenue) who have applied
for funding in the past three years or intend to apply in the next
three years, the findings revealed that smaller SMBs are at
increased risk of experiencing financial exclusion, compared to
their larger peers.
SMBs are drivers of job growth for the economy with new
businesses launching daily. In order to start up and thrive, these
businesses need access to capital for growth. However, due to a
lack of information caused by short/scant commercial credit
histories, bad personal credit or unwillingness on the part of
owners to provide personal financial information, financial
institutions can be hesitant to lend to SMBs.
"There is great opportunity for financial institutions to extend
credit to a larger share of the more than 30 million SMBs in
the United States, but these
institutions need access to richer data that can help evaluate
creditworthiness in a way that does not add risk to their lending
portfolios," said Ben Cutler, vice
president, business risk and specialty markets, LexisNexis Risk
Solutions. "Many SMBs want or need credit but believe they will be
denied. Financial institutions run the risk of excluding a sizeable
number of potential and loyal customers by not properly educating
them on and providing options for funding."
The smallest SMBs, with under $100,000 in annual revenues, are less likely to
1) have a good understanding of the financing available; 2) believe
they have sufficient access to credit; and 3) have applied for
funding in the past three years. While they want credit, they
believe they will be denied due to a lack of a lengthy commercial
credit history. Additionally, some SMB owners have bad personal
credit and assume this disqualifies them from accessing credit for
their small business. However, data shows that 66% of SMBs earning
less than $500,000 indicated they
would be loyal to a lender that approves them for funding.
While many small SMBs are eager to apply for funding, they are
generally less willing to provide personal financial statements or
personal guarantees in order to secure that funding. They are also
less likely to have a good understanding of the financing options
available to them, which can further exclude them from accessing
the funding they need. By educating SMBs on their financing options
and using enhanced sources of data in their lending evaluation
process, financial institutions can make more informed decisions,
which can help win long-term customers they might have otherwise
turned away.
Download a copy of the LexisNexis Risk Solutions 2019 Small and
Mid-Sized Business (SMB) Financial Inclusion Report here.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data and advanced
analytics to provide insights that help businesses and governmental
entities reduce risk and improve decisions to benefit people around
the globe. We provide data and technology solutions for a wide
range of industries including insurance, financial services,
healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout
the world and are part of RELX (LSE: REL/NYSE: RELX), a global
provider of information-based and analytics and decision tools for
professional and business customers across industries. For more
information, please visit www.risk.lexisnexis.com and
www.relx.com.
Media Contact:
Marcy
Theobald
678.694.6681
Marcy.Theobald@lexisnexisrisk.com
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