What’s the point of a business credit score anyway?

In your own personal life you probably know why your credit score makes a difference. You need to get a mortgage to buy that house you need because you’re in that place in your life when settling down seems the thing you’re supposed to do.  You want to get a credit card so that you can take advantage of some last minute holiday deal to a sunshine resort but don’t have the funds to pay for it now.


You know that when you apply for these things your credit score is going to be looked at by the banks or the credit card companies to see whether you’re worth them risking their money on you.  Are you going to pay them back?  Are you going to pay them back regularly, and on time?


Without a good credit score, you probably know that your chances of getting the card, or the loan, or the mortgage, are reduced.  Or you won’t get quite as much as you hoped for.  You might get a £3,000 credit limit as opposed to a £5,000.  Or a 6 months interest-free period as opposed to 12 months.  You might be advised to provide 25% of the value of the property as opposed to 15%.


All because your credit score doesn’t show the financial institutions that you’re a good CreditScore100risk for them.


Well, it’s exactly the same for businesses when they need to get their hands on a new source of funding.


The financiers will take a look at the credit score of the business to see whether their money is going to be safe, but whilst we’re aware of this in our private lives, small businesses often pay no attention to it in their business life.


A Department for Business Innovation & Skills report into how small businesses try to raise external financing found that 69% of UK businesses had NEVER checked their credit score, despite the fact that 56% of SMEs have required external financing during the previous three years in order to operate their business.


CreditScoreAnd what happens when you need to get external financing?  Your credit score gets checked.  That’s a whole host of businesses going into financial negotiations completely blind as to their chances of success.


You need a loan to extend your premises or buy that new van.  You contact a source of external finance and the first thing they’ll do is check how big a risk you are to them, and they’ll find out your credit score before you do!


How is it possible to plan your business if you have no idea what finance your likely to get given your credit score and visible financial record?  The reality is that most businesses don’t plan this kind of thing.


The average time between a business enquiring about external finance and actually needing to use the finance is just 8 days.  That’s not a lot of time to adjust your plans if you’re unsuccessful in getting all the finance you need, or the finance you do get is more costly than you expect, both of which might happen if your business’s credit score isn’t in good shape.


That’s why you should be monitoring your credit score from the day you start trading, because at some point in the future you’re likely to need it, and by that time it needs to be as good as it can be and there’s no time to take any steps to improve it if it isn’t.


Start putting some positive effort into your business credit score today so that when the time comes you’re ready.  Check your score regularly, ensure the details are correct, pay your bills on time, file your accounts on time, don’t go overdrawn, and don’t default on any debts.  You’ll then have a much greater chance of being able to finance the business on your terms.


What’s your business’s credit score?

Feedback on the new look CreditFocus

It’s been a busy week at Ormsby Street as we switched the customers of CreditFocus over to a new platform.  This switch has been a few years in the planning and comes as a result of a whole range of things, but when you’re moving so many customers we’re bound to have missed something, and we did.

The majority of feedback we’ve had has been positive for the change, but there are some much-loved features which the customers we spoke to yesterday are missing.  Things like finding companies via the A-Z list, daily summary emails, and being able to download a PDF document of a company’s profile.

We’re already on the case with some of these so we can expect some updates to the service over the coming weeks, and that’s one of the huge benefits we have in this new platform compared to the old one.

We’ve been testing features of the new platform over the past couple of years with some other customer groups and the ability to roll out new features is now a relatively smooth one, so we’ll push some new updates out soon.

As well as the updates mentioned above that will bring back some favourite features, we’ve also got some exciting new features to rollout, including our integration with cloud accounting software, which is currently in beta testing with one customer group.

Our cloud accounting integration leverages the data held within the accounting software and combines it with up-to-date financial risk data to help small businesses understand their greatest risks and prioritise action to reduce this risk and improve cash flow.

So watch this space!

In the meantime, thanks for all your patience.  We know change can be disruptive, but we know you’ll love what’s coming down the line.


Helping other small businesses help themselves

Nearly a year ago we used the subscription fees we received to lend to small business operators around the world as part of the Lend With Care programme.

Since then, the businesses we’ve been supporting have gone from strength to strength and our loans are being repaid on time.

As we’ve had a large chunk of our loans repaid we thought we’d reinvest these funds in some more small business operators, to help them grow and make a difference.

Asad Hameed is 43 years old and lives in Datanagar, Pakistan. He is married and has three sons and three daughters, all of whom are in full time education. Asad has been a tailor for the past 20 years and is the only wage earner in his household.  His business is growing succesfully but he now needs to bring on board an extra pair of hands in order to satisfy the demands of his growing customer base.  So we’ve completed his load with Lend With Care and he can now help his business reach its potential.


At Ormsby Street, we support small businesses in taking control of their money so they can grow their business and make a difference in their communities.  Through our cash flow management and financial insight services we help them make informed decisions on who to trade with and give them tools to get hold of the money they are owed.

2017 should be an exciting year for Asad, and we hope it will turn out to be an exciting year for all our small business customers.

Merry Christmas and a Happy New Year from all at Ormsby Street!





Do your retail clients make you wait for your payments?

Tesco are currently classed as the worst for late payment in a list of the UK’s best-known retailers, taking an average of 105 days beyond terms to pay its suppliers, according to our latest analysis.

Our data analysis also reveals that the average time taken to pay a supplier amongst the list of 20 retailers was 45 days beyond terms. Previous research shows that the average overdue invoice to a small business was worth £6,142, small business suppliers to some UK retailers could be waiting prohibitively long to receive late payments on a considerable amount of money.

martinMartin Campbell, managing director of Ormsby Street know that, whether it’s a small greetings card designer or a food manufacturer of some sort, winning a contract to supply a national retailer can be a landmark moment for a small business, particularly in the lucrative Christmas shopping season, but just because a retailer is a household name, it’s no guarantee they are going to pay on time.

He says, ‘Because Christmas is such a major part of the shopping calendar, any orders may be much larger than at other times of the year. This means that a small business could be waiting for even more money during the festive period. If they have had to take on extra staff or resources to meet the order to a major retailer, this could be a potentially difficult and damaging time for their cash-flow.’

The best retailer in the list when it comes to paying suppliers, is high-end department store, Fortnum & Mason, which takes an average of just five days beyond terms to pay its suppliers. In second place was Lidl, which takes an average of nine days beyond terms, followed by House of Fraser and John Lewis, who pay on average after 15 and 18 days beyond terms respectively.

Campbell adds, ‘Negotiating with a major retailer on things like payment upfront can be tough – retailers are all aware that for a small business it’s a big deal to get their products in front of a national audience and so they usually hold the trump card.

‘But that’s not to say that small businesses should just accept the situation. If the retailer values the product and wants it in their store, there should always be a little leeway for negotiating better payment terms.’

The analysis showed that amongst 20 of the UK’s leading retailers, seven of those took on average more than 60 days beyond terms to pay their suppliers, a period of time that is hard to justify.

Campbell concludes, ‘For a small manufacturer or supplier, winning a national retail contract can feel a little like Christmas has come early.

‘Yet if it means they have to wait more than two months to receive payment, it is a big decision as to how any shortfall in cash-flow can be bridged, if indeed it can. The answer lies in small businesses protecting themselves against late payments by learning more about the financial health of their customers, negotiating more favourable payment terms and then chasing hard for late payments.’


Notes: The data used in the analysis was provided by Experian, the global credit reference agency, and looks at the credit rating and payment performance looking at 20 of the UK’s leading retailers. This data is available to users of their services.

The payment performance information generated is gathered from a network of six thousand suppliers over a period of three months (up to and including 31 October). Experian provides further information on payment performance data on its FAQ pages.

Our favourite small businesses

As part of Small Business Saturday the team have taken the time to tell us about their favourite small businesses.

Auto Repair Medway

autorepairRob is our Head of Product (and possessor of hair that will stand up in the wind as shown in this photo!).

It’s always great when you can find a local car mechanic you can trust and Auto Repair in Medway are just that.

Rob says “my car’s  windscreen wipers stopped working and needing replacing.  The guys at Auto Repair called Ford for the part but were quoted an extortionate price, so told Ford to keep the part.  They phoned me and advised a quick search online for the part and it saved me hundreds of pounds.”


Nin Com Soup, Old Street, London


Matt’s the youngest of our team and he loves a nice warming lunch (his Mum would be pleased with him!), so he heads to the amusingly named Nin Com Soup within Old Street underground station.

“Great flavours in their ever changing range of soups, and a name that makes me smile every day” says Matt about his favourite lunchtime haunt.

“And they take Bitcoin, which fits with our FinTech business.”


Stephen Jones Millinery, Great Queen street, London


Resident fashion expert Lorelei puts us all to shame with her daily fashionable outfits, and here she is outside Soho milliners Stephen Jones.

Here am I outside of this beautiful shop of hats and fascinators thinking of my next big event.”

And her enthusiasm doesn’t end there. “This shop makes me want to be part of some royal parties where I can look fabulous.”

Deliciously French, Cookham, Berkshire


Despite growing up to the west of London, Head of Engineering Stuart fancies a bit of the French life, with his local French delicatessen Deliciously French.

“Honestly, it’s not just the wine I like” says Stuart.  “I do also love a bit of cheese to go with it.”

Deliciously French’s ethos is sourcing produce from family run establishments, which keeps small businesses going on both sides of the channel.


Hello Gorgeous Hairdressing, Battersea,


“Who doesn’t love phoning to make an appointment and being met with the welcome ‘Hello Gorgeous'” says Carolyn, Product Delivery Manager for Ormsby Street.

“I’ve been going here for years and it still makes me smile when they answer the phone.”

Their motto is ‘luxury is a necessity’ which shows a small business who know their customers and know how to make them feel special.



Ormsby Street, Old Street, London


New boy Parsh tries to earn some brownie points by telling us that we’re his favourite small business.

“I’ve enjoyed my first two weeks here” he says.  “Coming from a larger business with a larger team to a focused small business like Ormsby Street has been a great experience so far.”

Parsh is responsible for developing our understanding of the credit scoring, late payment and company performance data that we use to make our services like CreditHQ support small businesses in getting control of their money.


On this day … 26th October … Ormsby Street featured in Small Business Saturday

We’re proud to have been chosen by Small Business Saturday as one of their Small Biz 100, and 26th October is our featured day.


We can add this to the list of historic things that have happened on this date, including:

1994 – Egypt and Jordan sign a peace deal to end 46 years of war

1992 – General Motors Corp. Chairman Robert Stempel resigned after the company recorded its highest losses in history

1959 – We see the far side of the moon for the first time

1949 – U.S. President Harry Truman raised the minimum wage from 40 to 75 cents an hour.

1947 – Future US President (?) Hilary Clinton was born

1942 – British actor Bob Hoskins was born

1916 – Former French President Francois Mitterand was born

1881 – The “Gunfight at the OK Corral” took place in Tombstone, AZ. The fight was between Wyatt Earp, his two brothers and Doc Holiday and the Ike Clanton Gang

Small Business Saturday UK is a grassroots, non-commercial campaign, which highlights small business success and encourages consumers to ‘shop local’ and support small businesses in their communities.

The day itself takes place on the first Saturday in December each year, but the campaign aims to have a lasting impact on small businesses. In 2016 Small Business Saturday will take place on Saturday, December 3rd