In our previous blog post, we looked into the importance of financial statements and financial data to small and medium enterprises, how they could harness insights from these records and use them to grow and thrive, even in the new normal.

Similar to the way that proper analysis of financial statements can immensely benefit businesses, banks and other financial institutions may glean insights to make data-driven decisions in lending, particularly in the evaluation of business loan applications.

Which brings us to the gist of this series: Why audited financial statements are essential in a wide variety of business areas, including lending and customer credit.

Despite being required to ask borrowers to submit audited financial statements along with their business loan or customer credit applications, many still do not realize the importance of these financial records in credit evaluation.

Faster credit evaluation

While some may view audited financial statements as understated, primarily because they are audited for tax purposes, the analyses of these financial statements will promote in financial institutions a more conservative approach to lending. This is timely, considering the recent tightening of lending standards due to ongoing struggles with the COVID-19 pandemic.

Since its inception, CreditBPO has been advocating for a shift from collateral-based to risk-based lending and methods for quantifying management capability and risk profiles against industry trends.

With the CreditBPO solution, lenders will have a financial condition rating of borrowers as a quantitative metric in their business loan application evaluation.

Who else needs ’em?

Apart from banks and other lenders, who else may benefit from CreditBPO award-winning financial condition rating and benchmarking solution?

Company management: As previously mentioned in this blog post and the one before this, CreditBPO can provide the managers of companies with a financial condition rating and benchmarking tool to enable them to make data-driven operational and financial decisions about their businesses.

Investors: In the same light, the same report can prove valuable to investors, who may want to find out how their investment is performing and might use the solution to benchmark their company’s financial performance against other companies in the industry it is in.

Employees: A company may want to share the report with its employees to increase their participation in its affairs and their understanding of how the business works.

Customers: CreditBPO can provide companies who are interested in selecting suppliers for major projects with the financial condition rating and benchmarking reports to enable them to examine the financial capabilities of suppliers to deliver on contractual obligations.

Suppliers: On the flip side, suppliers themselves may want financial condition reports of their customers to determine whether it is safe to extend credit.

Competitors: It’s not unusual for competing companies to research a competitor’s financial condition in order to gain valuable information to alter their business strategies.

Investment analysts: Investment analysts may be interested in gaining financial insights to help them decide whether to recommend a company’s securities to their clients.

Governments: CreditBPO works with government agencies and local government units to determine whether businesses applying for renewal of government papers have paid appropriate taxes.

These are just a few individuals and organizations that may benefit from the CreditBPO solution.

Ready to implement a transformational change in your credit evaluations and credit risk management processes? Schedule a call with us here and we will walk you through how to leverage and make use of what today's technology offers through CreditBPO.