Traditional banks, which have long relied on human-intensive processes and legacy systems to evaluate small business credit, have been gradually reducing their unsecured small business lending activity for decades. This has resulted in a major lack of access to credit for small business. Even those small businesses that are lucky enough to have a shot at bank financing tend to find the process overwhelming and time consuming. Merchant Advance Capital’s goal was to solve this problem using new approaches and technologies. Since its inception, the company has looked at over 10,000 small business funding applications. In its 6 years of funding small businesses the company has built its own proprietary credit scoring model which categorizes applications into a number of risk buckets. The development of these models has been critical to scaling the company’s operation and providing a fast and convenient borrowing experience for its clients. In David Gens’ presentation, he will give some insight into some of the major factors that have proven to be statistically significant in predicting small business credit performance and the importance of alternative data sources to doing business in today’s technology-driven world.

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