Commercial Credit Reports
A commercial credit report is based on definitive attributes of a business. These attributes contribute to the fundamentals of granting credit to a commercial business. Companies (the creditor) attempt to mitigate the risk of lending to their customers (the debtors) by performing a credit analysis on the businesses when the debtors are applying for a credit terms account. The process is based on a review of five key factors which help predict the probability of a customer defaulting on his payment commitments to the creditor. In credit terms these attributes are more commonly known as the Five C's of Credit, which are Capacity, Capital, Conditions, Character and Collateral. In today's economy there is no credit standard which requires the use of the five Cs of credit, but the majority of credit professionals review most of this information prior to extending credit terms to a new customer and/or to increase a credit line to an existing customer.
Each company has their own credit policies for analyzing a customer's creditworthiness, but use of the five Cs of credit is common when analyzing credit applications. Of the quintet, capacity – basically, the customer's ability to generate cash flow from their customers to repay your company generally ranks as the most important. Customers who have high marks in each category are more apt to receive increase credit lines and more favorable repayment terms.
Our credit reporting services are investigative which provides our clients with a commercial credit report containing in-depth analysis, supplier payment trends, legal, claims, business data and other derogatory items.
Commercial Credit Reports
Current / historical banking information
Any historical information on hand
Current / Past derogatory activity
Confirmation of the legal name
Public record Information
Trade credit references
Credit application verification
Reverse Due Diligence
The saying "Let the Buyer Beware" can easily be turned into the saying "Let the Seller Beware".
You have invested a lot of time and resources in building your company so when selling your product and/or services to a potential new or existing customer on credit terms due diligence should be processed at the front end, before the sale commences.
Get to know the character of your customer and determine whether your customer has the means to pay you within the payment terms you have extended. Find out how your customer pays his existing creditors and whether there are past or ongoing litigation. Is your potential new customer with a big purchase a bad credit risk? Its best to be proactive at the beginning vs. reactive at the end when trying to get paid.
Reverse due diligence, before commencing the sale anticipate what you will do if the customer does not issue payment, how will you recover what is rightfully owed to you, what extra steps will you have to take, what loopholes do you need to plug, what are your rights and what are the estimated legal costs. By having the answers in place at the front end you should have a smooth sale transaction.
Get to know your customer:
How do they pay? When do they pay? Constant delays? excuses? Deductions taken?
Commercial - Construction Credit Solutions