Expect the Unexpected HOW SMALL BUSINESS OWNERS CAN

Expect the Unexpected HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES Amber Colley February 11, 2018

Just a few of the challenges businesses have faced recently: Natural disasters Product and part recalls Large customers or partners declaring bankruptcy Government shutdown HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 2

Just a few of the challenges small businesses face regularly: Cash flow Growth Hiring Replacing equipment HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 3

HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 4

How can business credit help?

Business credit can help show your company’s credibility when you need to demonstrate it most. HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 6

To understand how, let’s see what’s inside a business credit file: – business information – scores and ratings – liens and judgments – credit limit recommendations HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 7

These components may be used by other companies to help them decide: – whether or not to work with your company – whether or not to approve a loan or extend a line of credit – what terms and conditions to offer HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 8

Let’s look at Dun & Bradstreet scores and ratings

Scores & Ratings Performance Scores: 1. PAYDEX® Score 2. D&B® Rating HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 10

Scores & Ratings Predictive Scores: 1. D&B® Delinquency Predictor Score 2. D&B® Financial Stress Score 3. D&B® Supplier Evaluation Risk Rating HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 11

There a variety of factors that go into calculating scores and ratings, but here are two: – financial data – trade payments Here’s how they may impact how other companies looking at your business credit report can view your company. HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 12

Understanding D&B Predictive Risk Scores Tour & Discussion Viability Rating CCS Delinquency FSS Failure Risk Score Paydex Combinin g Scores Predictive Performance of Portfolio Comparison with Available financial data and no financial data but with established Trade Payments Available Financial Data Established Trade Payments Bad Rate ICON Average Bad Rate. 6% Lower Risk Higher Risk Portfolio Comparison ü Average bad rate is 0. 6%, significantly lower than combined average of 14% ü Ranking businesses within this peer group provides additional insight into financial performance Average Bad Rate 5% Lower Risk Higher Risk Portfolio Comparison ü Average bad rate is 5%, lower than the combined average of 14%. ü Ranking businesses within this peer group provides additional insight into detailed payment trends relative to viability HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 13

What does that mean?

It means that in some cases, businesses looking to work with or extend funding to your company might be dissuaded from doing so if they view your business credit file. Without financial data or trade payments to help calculate your scores and ratings, you can’t help show your credibility through your scores and ratings. HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 15

What can you do?

Unlike personal credit, business credit may be positively impacted by: – Adding financial statements – Asking Trade References* to add payment experiences • Note that negative experiences with Trade References can negatively impact your scores and ratings, as well – Making sure your company information is up to date – Disputing liens or judgments that are in error * Trade References will be added subject to Dun & Bradstreet verification and acceptance. Trade References are counted as fulfilled when a qualified reference is successfully added to your report. Please see the Trade References glossary page for eligibility, process and other information regarding Trade References. UNDERSTANDING THE IMPACT OF YOUR DUN & BRADSTREET D-U-N-S® NUMBER 17

One way to update your company information: HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 18

So, I’ve done those four things, now what?

Well, your business history is also part of your profile and it compares against others in your industry, so you’ll want to continue to maintain your strong business credit and monitor it for changes. HOW SMALL BUSINESS OWNERS CAN HELP PROTECT THEIR COMPANIES 20

Questions?

We’re here to help! Thank you!