Credit boost

Trade credit providers to share Data a boost to SMEs raising credit

Data sharing rules will be changing to allow data sharing which should make more trade credit available to SMEs.  Credit limits are expected to rise by a total of £2.4 billion.

These new rules will allow trade credit providers to benefit from the data sent to credit reference agencies (CRAs) by banks and other lenders when they are assessing applications for credit.

Max Firth at Experian, said:

“SMEs stand to gain the most from increased data sharing. Thousands of smaller companies will get a trade credit limit for the first time, increasing options when accessing the finance they need to thrive. Meanwhile, trade creditors will have more information at their disposal so they can make smarter decisions.”

It is also estimated 50,000 mostly smaller businesses will receive a recommended trade credit limit for the first time. Most of the shared data, which will be used within credit scores and credit limit calculations, is positive, so the study found more than half of businesses will see their credit scores increase when this data is made available. About 40 per cent will not experience a change.

The combination of the change in the voluntary data sharing rules and new regulations mandating the sharing of credit data should improve credit availability for SMEs.