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Targeted scores pay dividends for Small Business lenders

May 19, 2011 by Greg Carmean

Many small business lenders seem anxious to increase their lending activity, but are wary of lingering economic risks, and for good reason. According to Experian’s BizSource database, as of March 2011 about 58 percent of delinquent small business accounts were likely to go 91+ days delinquent. By comparison, only about 18 percent of larger business delinquencies were likely to become severe. This increased risk, combined with the low-dollar value associated with many small business transactions presents a dilemma for large volume lenders.

To address this issue, scores have recently been developed that predict a small business’s performance on a particular product (e.g. commercial card account) rather than its delinquency across all its obligations. These scores provide an accurate and cost-effective way to identify accounts likely to go delinquent on the products within your portfolio. Learn more about how product-specific scores can help you maximize your portfolio, while minimizing your risks here.

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