Finance Company Leverages New Scoring Solution to Approve More Small Business Loans
Company Size
1,000+
Region
- America
Country
- United States
Product
- LexisNexis® Small Business Blended Credit Score with Attributes
- LexisNexis Risk Solutions scores and attributes
Tech Stack
- Predictive Analytics
- Data Mining
Implementation Scale
- Enterprise-wide Deployment
Impact Metrics
- Customer Satisfaction
- Productivity Improvements
- Revenue Growth
Technology Category
- Analytics & Modeling - Data Mining
- Analytics & Modeling - Predictive Analytics
Applicable Industries
- Finance & Insurance
Applicable Functions
- Business Operation
Services
- Data Science Services
- System Integration
About The Customer
A specialty finance company that provides financing to medical professionals approached LexisNexis® Risk Solutions to help them decision small business borrowers. The company operates in a niche market, focusing on providing financial solutions tailored to the needs of medical professionals. They have a significant presence in the United States and are known for their innovative approach to lending. The company has been in the industry for several years and has built a reputation for understanding the unique financial needs of their clientele. They are constantly looking for ways to improve their credit underwriting processes to better serve their customers and expand their loan portfolio. By leveraging advanced data analytics and predictive modeling, they aim to make more informed lending decisions and reduce the risk associated with small business loans.
The Challenge
The lender was looking for a way to optimize small business credit underwriting in an environment where credit information on the business entities they were lending to was typically either unavailable or very thin. They were in the process of redeveloping their credit models and were looking for new data sources; sources that could help provide insights where there were gaps. The lender tested the LexisNexis® Small Business Blended Credit Score with Attributes against several other sources they had used in the past and against some new sources they were considering. They found the LexisNexis Risk Solutions scores and attributes to be the most predictive of them all. At one point, they requested a second test file because they thought maybe the initial one reflected results that were so good, something had to be wrong. When the second test file performed as well as the first, it was clear that they had discovered a new source that could help them to make better risk decisions faster.
The Solution
LexisNexis Risk Solutions has been collecting information on businesses and on people for many years. A few years ago, their Analytics team set out on a mission to find predictive insights on small businesses and their owners. Given that trade histories are sometimes hard to find, they explored whether insights could be derived from other sources they had been collecting for years. They investigated whether the payment performance of a small business correlates to the presence or absence of liens or judgments, good standing with the Secretary of State, property ownership, or business owners with felony convictions. The answer was affirmative. These and other public record data sources proved to be very useful in predicting the payment behavior of a small business. The LexisNexis small business credit products include scores, reports, attributes, monitoring, and more. They bring new insights on small businesses so lenders can book more loans. By integrating these insights into their credit models, the finance company was able to make better risk decisions faster, ultimately leading to more approved loans and a more efficient underwriting process.
Operational Impact
Quantitative Benefit
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