Our aim is to combine smart technology and expert human judgement to understand small businesses than any traditional finance provider. In particular, we try to understand the affordability of any credit and the associated risk we offer to help us to decide whether to approve an application and at what rate.
How does risk impact pricing?
Having an accurate assessment of risk allows us to set pricing fairly. If you're a lower risk, more stable business then we'll generally be able to offer a lower rate than if your business has fluctuating cash flow or limited trading history.
Note that even if we view your business as higher risk, it doesn't mean that we think your business is unlikely to succeed or can't benefit from the funding. In fact, some of the fastest growing businesses we support have slightly higher risk profiles because they're new or are constantly seeking out new opportunities. If we didn't think you could benefit from the funding then we wouldn't approve you.
What goes into your risk assessment?
When you sign up to iwoca, you'll fill in some simple data about your business and yourself such as your company name, your own name and your date of birth.
Based on this information, our systems automatically gather supporting information for your applications from dozens of external sources. This includes data from Companies House, your credit history (we use "soft searches" so it doesn't affect your credit score) and business listings from across the web.
We'll also typically ask you to upload simple documents such as bank statements or VAT returns (learn more). Alternatively, you can link your internet banking or other online accounts (e.g. Xero, eBay, Amazon or PayPal). We'll analyse this data to build up a picture of your trading history and cash flow forecast.
Finally, all of this data is combined to give a 360 degree view of your business which allows us to make an accurate risk assessment. This may be done automatically within seconds or we may refer it to a expert in our credit team if we feel it could benefit from additional manual review.
If you're not happy with an automated decision, we're always happy to review it manually (it's not a matter of "computer says no"). Just let us know.