More businesses to score bank loans
The introduction of credit-scoring by the big banks for small business loans may make it easier for SMEs without sufficient security or business history to borrow. Credit-scoring against a set list of specific lending criteria is already used to approve credit card or personal loan applications but Australia has lagged behind the US and the UK in using the system for small business loans. CommSec Research predicts that Australian banks will be using credit-scoring within three years with the drive coming from regional banks and non-bank institutions, as well as from cost-cutting. Scoring should cut loan processing time, as well as costs. Although CommSec said the first bank to introduce credit-scoring will be Westpac, ANZ says it's already introduced it. A spokeswoman said the bank's small business loan applications are either assessed through credit decision tools or referred on to relationship managers.