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Clueless credit ratings

Last week I started working on an invoice financing arrangement (now completed) for a business with one particular stand out client. Not an unusual scenario of course

Their client turns over £12m a year making a healthy profit and has a net worth of £500k. in addition the net worth closely reflects the working capital. They are growing fast and have sewn up a niche in a serious but rapidly growing market

Nothing to dislike there but one lender resorted to simply looking at a credit report on this business. The agency they use is not, lets put this kindly, the best in business and they had given the client a “nil” rating. This on what are clearly strong accounts as well as no adverse legal information with the filings were bang up to date

On that basis they didnt take even the slightest step to engage with my client.

Thats their choice and as anyone who knows me will tell you I was talking to handful of other lenders at the same time. One of whom managed to get the client insured for credit up to £100k

Credit ratings are very subjective and often simply plain wrong, all of which leaves me amazed that so many highly paid underwriters cannot or simply will not look beyond the half baked rating of a clueless credit agency

Dont ever complain about a lack of business if you are not prepared to work for it



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