Is a credit score just for me as the Consumer?


It seems that not a day goes past right now, when credit scores are not advertised on the TV. Even my children are interested in their credit score, whereas I don’t think I even knew about this until mortgages and credit cards came along later in life. It has to be a good thing that they are now front and centre and not behind the curtain, as they really matter in all aspects of both our personal and business life.

As many of our clients recovered from the pandemic period, cash and the availability of working capital, or growth funding, has been more restricted than previously, and as such many clients have sought funding options.

This is where the credit profile of your business, and the associated risk profile that comes with it from a lender’s perspective, really matters.

Let me tell you a real client story.

The client believed that they needed some additional cash in the business. They responded to an advert and went directly to a high profile lender, and were delighted to receive an offer. When the client then discussed that offer with us, as part of our monthly meeting, we could advise them that this may not be the best offer they could get and the decision was taken to reject the initial offer, but put a new application through MAP and Capitalise.

The immediate result of this was that the arrangement fee decreased from 10% to 6.5%

Now it would not be appropriate to comment on the size of the facility, but a saving of close to 50% on any arrangement fee is a significant saving. 


So why could MAP achieve this for this client? 


It goes back to the work we put in to improve the Financial Maturity of this business 12 months ago. This time last year we submitted the Year End accounts for the business, but due to the level of funds taken from the business throughout the year, a negative equity position was created, causing the credit score to drop considerably.

Their MAP Client Accountant recommended our Credit Monitoring Service, which throughout this year has allowed the business to remove some of the other negative factors contributing to the low credit score. When we started this process, the credit score was just above 50, with a corresponding level of credit limit against the business.

Over the last 9 months, their MAP Client Accountant, acting as their outsourced finance function alongside the business owner, has worked to improve the business finances which allowed us to submit the latest set of accounts, with a much healthier balance sheet, within 2 months of the year end 

The result of this was that the credit almost doubled to 93, with the corresponding credit limit quadrupling.

To complete this process, the client has now invested in a budget incorporating a cash flow giving the detail that allows the client to decide how much funding they actually need and over what length of time.

MAP has a number of tools and services that are all designed to help you and your business achieve better Financial Maturity. If you are a client, then ask about this with your client accountant.

If you’re not a client yet, then even more reason to talk to us.

Stuart Brown