Valuatum Credit Risk System in Practice
Valuatum Credit Risk platform can be used as a preliminary screening tool that allows potential loan applicants to do most of the work before even contacting you. The applicants can fetch the financial statement data of their company to the system from an outside data provider or input it directly using an easy-to-use data entry tool. They will instantly see their credit risk rating and get a preliminary decision indicating whether they are a suitable candidate for a loan. They can also input and adjust financial estimates and see what could be done to improve the financial position of the company. If the company meets the criteria set by you, a loan application can be sent directly from the system with a click of a button. Application can include automatically generated reports, which you can easily share internally or with your investor clients.
We have developed this feature to make your life as a creditor easier when screening for new customers, but also to lower the bar for companies that are seeking for funding.
- Reduce the number of bad applications and improve the average quality of applications
- Speed up the process for both parties
- Increase the transparency of the process for the applicant
- Increase the transparency between you and your investor clients
- Provide applicants an impartial opinion of the financial status of the company, including bankruptcy risk and credit rating
- Have all the necessary information readily available in one place
- Get access to automatic reports that can be shared with investor clients
Below we provide a more detailed description of the process. Keep in mind that Valuatum system relies on customizability, which means that any part of the process can be tailored to fit your needs.
We have also created an interactive demo you can use to test the process yourself from customer’s point of view. We still recommend that you go through the steps below as they will work as instructions when you are testing the system but you can also move to the demo directly by following the link below.
Demo will open in a new browser tab
Detailed overview of the process
1. Recognize the need for funding
Company recognizes that they need funding.
2. Company starts seeking for lender
Company seeks for funding by contacting potential lenders or financial planners.
3. Company is directed to Valuatum system
Company is directed to Valuatum system to evaluate their financing options.
4. Customer registers to Valuatum system
Valuatum provides a registration form that can be used to register to the system. Alternatively, if you wish to have more control over who registers to the service, that is possible as well. We can also automatically define the permissions the new customers have and they will, for example, only see data that you wish them to see.
5. Customer enters the company name or VAT number
Customer starts the process by entering the company name or VAT number to a search box.
6. Company data
Nearly any external financial data provider can be integrated into Valuatum system and the customer can fetch their company data directly with a click of a button. Alternatively, it is possible to not use an external data provider and the customer inputs the company data themselves.
7. Review the numbers
Valuatum system includes thousands of data points for each company, including all the common key figures and financial ratios, which are all calculated automatically and can be viewed instantaneously after the model is saved. This also includes bankruptcy risk of the company calculated with state-of-the-art machine-learning models as well as different credit rating variables derived from the risk value. Additionally we can create customized rating variables that best suit your needs. We can, for example, automatically derive the proposed interest rate on a loan based on the bankruptcy risk and your specifications. You can read more about bankruptcy models in Valuatum system here
12. Customer evaluates whether they qualify for a loan or not
Customer can instantly see the compan’ys bankruptcy risk (both absolute and relative to mass) and credit rating calculated based on customizable rules. It is also possible to create additional parameters that tell, for example, interest rate or maximum credit limit.
If the customer is not qualified, the process ends here and there is no time costs to the lender. Customer also has the option to use Valuatum system to analyze what could be improved in the future.
13. Send application
If the criteria for a loan are met, an application can be sent with a click of a button.
What the button actually does can be customized to your needs and level of integration you want. Some options are
FULLY AUTOMATED PROCESS
- Applicant clicks ‘Apply for a loan’ and is asked to fill in basic information
- Automatic report is generated and sent to your company for review. Report contains all necessary information such as financial statement data, key figures and ratios, bankruptcy risk, and credit rating.
- You can then either approve or dismiss the application
- Applicant clicks ‘Apply for a loan’ and your company automatically receives a notification
- You can then review the company in Valuatum system and get in touch with the applicant
- Automatic reports are printable from the system
- Applicant clicks ‘Apply for a loan’ and is automatically redirected to your company’s website where they can fill a formal loan application
- Your company can still view the applicant’s data in Valuatum system
- Automatic reports are printable from the system
14. Lender receives the application
Once the application is sent by the applicant, you will receive an automated message. This can also include automatically generated reports or other information about the applicant, depending on your wishes. If you allow your investor clients access to the system, it is also possible to automatically let them know about a new potential investment opportunity.
See below for a sample message and report that you could receive when someone sends an application. Keep in mind that we can tailor this in almost any way possible!
15. Lender evaluates the application and the company
After you have received the application you can see the financial information in Valuatum system, including any key figures, estimated bankruptcy risk, and credit rating. You will have access and evaluate the estimate numbers the applicant has inputted into the system and create your own scenarios to analyze the applicant’s potential.
16. Lender presents the case to investor clients
Depending on the operating model, you can automatically print reports from the system that you can then present to your investor clients. Alternatively, you can grant your investor client full access to the system where they can evaluate the case and create their own scenarios.
We also provide different API solutions if you wish to fetch data from Valuatum database to your own website or database.