By Daniel Hunter
Start-ups are around 30% less likely to go out of business in the first year if they credit check their customers, according to fintech start-up Ormsby Street.
The small business analysed the data of its credit-checking tool CreditHQ over 12 months, finding those that carried out regular credit checks on customers were more likely to stay in business after a year.
“Using a credit checking tool... could be the difference between survival and going out of business for many SMEs (small and medium-sized enterprises), especially in that notoriously difficult first 12 months,” said Martin Campbell, Managing Director, Ormsby Street.
“It helps a small business establish a good credit rating and also addresses the issue of late invoice payment by providing insight on whether customers are likely to be good payers or not."