Valuable Info You Won't See on Most Credit Reports

Small businesses use their credit cards and lines of credit heavily to get points and cash flow their businesses. A prospective customer of yours could be heavily in debt, but most credit reports would not indicate so. Much of this activity is not reported to the credit bureaus. This information is available mostly in only one place.

The Small Business Financial Exchange (SBFE) is a non-profit trade organization for small business lenders that advocates for the safe, blind exchange of small business financial data. Hundreds of financial entities, such as banks, credit unions, leasing companies, credit card issuers, captives, and more contribute data to SBFE. Since the lender-owned consortium follows a give-to-get model, many lenders choose to report only to SBFE.

Most small business credit cards and lines of credit require a personal guarantee from the owner. Since they are issued in the business' name, they are not generally reported to the consumer credit bureaus. This data does not appear on the business owner's personal credit report until the small business defaults. Even if you're pulling both consumer reports and business reports from one or more of the bureaus, you could still see a surprise default if you aren't also checking the SBFE database.

Business Credit Reports provides access to this valuable data through its partnership with Equifax. BCR has several combination reports that integrate the unique insights of D&B, Experian and Equifax, including SBFE data. If you as a credit grantor and small business lender want to know just how leveraged a small business is, you need to include SBFE information in your analysis.