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Credit Pal approved by FSB - 29/01/2010

Out of date credit information will threaten the survival of many small businesses and stifle the UK’s economic recovery, according to Graydon.

To tackle this growing problem a new joint venture between Graydon and Future Route – CreditPal – has been approved by the Federation of Small Businesses to ensure that supplier and lender decisions are based upon a company's current financial performance.

The recession has increased lenders' appetites for detailed evidence that firms are not going to default on their debts. But due to lenders' reliance on historical data, a company’s financial viability is judged on its performance during the slump, irrespective of the gains it is currently making.

The CreditPal system allows companies to upload monthly management statements to the credit reference firm which can then be validated using Future Route’s pioneering Validis software. The FSB will now provide CreditPal as a benefit for its members.

By providing validated monthly management statements companis can access finance needed to keep them on track for growth.

Despite CreditPal allowing companies to improve their access to credit, some firms are still cautious about data sharing.Martin Williams, Graydon managing director said: "Firms are cautious about sharing their data with the tax man, or competitors – but they can now decide to allow just their suppliers view the information."

Williams said that the system was now being used by major suppliers who were offering to raise clients’ credit scores for subscribing to the service.

CreditPal was approved by the FSB national committee on 27 January and Williams believes that it is likely to be unveiled at the FSB national conference in March.