Standard & Poor’s, a provider of financial market intelligence services, and Equifax, a provider of information services, have partnered to introduce a new chapter in small business loan analysis with the launch of the newly enhanced Standard & Poor’s Small Business Portfolio Evaluator.
Small Business Portfolio Evaluator (SBPE) is an analytical tool that assesses small business loan portfolio risk and also helps package these loans for sale into the capital markets – all through one resource.
SBPE is designed to obtain a portfolio-level view of small business loan risk. Using each borrower’s Equifax commercial credit risk score, the analytical platform analyzes individual borrower quality as well as geographic, business sector, and other correlations between borrowers to provide an assessment of a portfolio’s overall risk. The Equifax small business credit risk score is a preferred option for Standard & Poor’s in its analysis for rating US small business loans.
David Goldstein, managing director of Standard & Poor’s, said: Incorporating a host of analytical and technical upgrades, the model can lay the foundation for better-informed lending decisions by allowing institutions to identify the risk in their current small business loan portfolio. At the same time, it streamlines the process of analyzing, testing and assembling small business loan pools for sale into the secondary markets.
Michael Shannon, president of commercial information solutions at Equifax, said: We are delighted to offer with Standard & Poor’s a product that helps improve a financial institution’s decision-making process. The combination of Equifax’s advance risk scoring solution and Standard & Poor’s analytics makes SBPE a powerful risk tool for banks and credit unions that need deeper insights into small business loan risk.