Company

Sustainability as a part of the receivables funding risk assessment

The newly introduced SuRF score helps funders and sellers in fostering positive change together.  

How to decide whether or not to fund an invoice is a challenging question given that one needs to assess the probability that the funding will be repaid by on the creditworthiness pay of two parties: the seller and the buyer. From the start, Crowdz Smart Score has been supporting funders in making this decision by providing information about the credit performance of both parties involved. In line with the market demand for green investing, we recently rebranded our Smart Score to  Sustainability, Risk, and Financial (SuRF) Score, which in the future will provide funders with  both granular financial data and sustainability evaluation metrics about SMEs.

The SuRF Score: What’s new?

Real-time Surf Score updates

Unlike traditional risk scoring services which update their data as rarely as on an annual basis, Crowdz SuRF score changes in real time: the sellers’ timeliness of delivery and repayment automatically impacts their scores. Moreover, thanks to partially relying on the seller’s self-declaration of their financials, they provide funders with the actual current state of their companies. 

Granular scoring

Thanks to integration with multiple data vendors as well as proprietary repayment risk models, Crowdz is providing funders with a comprehensive overview of the aspects impacting the risk of non-repayment of the funding. These factors include, debt payment history of the buyer and seller, the average timeliness of debt payments, and the repayment performance within the Crowdz InvoiceXchange.

Coming up: sustainability scoring

Crowdz SuRF score will be  one of the first comprehensive risk metrics to include  sustainability as a factor in  SME debt payment forecast. We see this as an important service we give to the funders and to the sellers. On one hand, we want to  give the funders a tool to quantify Environmental Social and Governance (ESG) risk when dealing with an entity; at the same time, SMEs could use our tips to improve their ESG score and, more importantly, to find out how they can improve the sustainability of their businesses.

Why is it novel?

Current data providers like MSCI rely heavily on secondary data and public releases for their ESG scoring. While this works for major enterprises, SMEs usually don’t attract as much media attention and rarely release public statements. Crowdz intends to fill this void and propose a new standard for ESG scoring for companies of all sizes.

How is it done?

Crowdz is working together with SME representatives and ESG experts on quantifying the alignment of a company with the UN Sustainable Goals. By developing different models for various industries and company sizes (from a sole trader to a large enterprise), we intend to accurately depict how a company impacts its surrounding environment as well how it compares with similar businesses.

What’s in this for SMEs?

We see the SuRF score also as a metric for SMEs to track their progress in becoming more sustainable. By allowing business owners to track their score and providing them with tips for sustainability improvements, we hope that Crowdz platform will help them to drive positive change in local communities. In the end, we believe that our unique approach has the potential to become the new standard in SME sustainability evaluation!

By Tomasz Czernuszenko

October 27, 2020

Share this article

Company

Sustainability as a part of the receivables funding risk assessment

The newly introduced SuRF score helps funders and sellers in fostering positive change together.  

How to decide whether or not to fund an invoice is a challenging question given that one needs to assess the probability that the funding will be repaid by on the creditworthiness pay of two parties: the seller and the buyer. From the start, Crowdz Smart Score has been supporting funders in making this decision by providing information about the credit performance of both parties involved. In line with the market demand for green investing, we recently rebranded our Smart Score to  Sustainability, Risk, and Financial (SuRF) Score, which in the future will provide funders with  both granular financial data and sustainability evaluation metrics about SMEs.

The SuRF Score: What’s new?

Real-time Surf Score updates

Unlike traditional risk scoring services which update their data as rarely as on an annual basis, Crowdz SuRF score changes in real time: the sellers’ timeliness of delivery and repayment automatically impacts their scores. Moreover, thanks to partially relying on the seller’s self-declaration of their financials, they provide funders with the actual current state of their companies. 

Granular scoring

Thanks to integration with multiple data vendors as well as proprietary repayment risk models, Crowdz is providing funders with a comprehensive overview of the aspects impacting the risk of non-repayment of the funding. These factors include, debt payment history of the buyer and seller, the average timeliness of debt payments, and the repayment performance within the Crowdz InvoiceXchange.

Coming up: sustainability scoring

Crowdz SuRF score will be  one of the first comprehensive risk metrics to include  sustainability as a factor in  SME debt payment forecast. We see this as an important service we give to the funders and to the sellers. On one hand, we want to  give the funders a tool to quantify Environmental Social and Governance (ESG) risk when dealing with an entity; at the same time, SMEs could use our tips to improve their ESG score and, more importantly, to find out how they can improve the sustainability of their businesses.

Why is it novel?

Current data providers like MSCI rely heavily on secondary data and public releases for their ESG scoring. While this works for major enterprises, SMEs usually don’t attract as much media attention and rarely release public statements. Crowdz intends to fill this void and propose a new standard for ESG scoring for companies of all sizes.

How is it done?

Crowdz is working together with SME representatives and ESG experts on quantifying the alignment of a company with the UN Sustainable Goals. By developing different models for various industries and company sizes (from a sole trader to a large enterprise), we intend to accurately depict how a company impacts its surrounding environment as well how it compares with similar businesses.

What’s in this for SMEs?

We see the SuRF score also as a metric for SMEs to track their progress in becoming more sustainable. By allowing business owners to track their score and providing them with tips for sustainability improvements, we hope that Crowdz platform will help them to drive positive change in local communities. In the end, we believe that our unique approach has the potential to become the new standard in SME sustainability evaluation!

By Tomasz Czernuszenko

October 27, 2020

Share this article