May 10, 2012 Gerano White
With the economic cycle climbing uncertainly out of a recession, business managers face growth opportunities with new potential clients that need careful vetting. This is a special challenge for equipment leasing campanies and other small and medium sized businesses, where you trust your own assets to someone who may be either financially on the ropes or solidly on his feet and a good bet for a comeback.
Luckily, today there are more tools at hand than ever before for checking the credit history of the opportunities that walk through your door.
The traditional tool for managers is Dun and Bradstreet reports on corporations’ financial history. Now a newer breed of global financial information services offer a far wider range of information, with more detailed evaluations of small and medium size companies that have slipped through the financial information nets in the past.
- The rankings are not influenced by the business itself, as it can with the D&B reports that rely on self-reporting. The broader reports draw from a network of accounts receivable contributors and third party data vendors.
- More detailed comparisons in a client’s industry type.
- Access to details of a business owner’s personal credit history and standing, as well as those of his corporation.
- Chronologically summarizes all Uniform Commercial (UCC) filings on a given business when it has more than ten UCCs, offering you a quick look at your client’s financing patterns and trends.
- More information about a company’s bank, including the name, full addresses, telephone numbers, account types, date opened and account status.
- You can drill deeper into collection account data and leasing experiences and terms, government contracts and government loan data, information is perhaps the strongest predictor of credit risk for a company.
Each of these services offers particular strengths that you need to check out for your own purposes. A careful manager may use two or three, each giving a different perspective.