Outdated business credit scoring models are sidelining promising UK startups from essential funding, as these systems favor established firms over early-stage companies. The thin-file problem leaves many innovative firms unscorable or viewed as too risky for debt funding. Modernization efforts using AI and alternative data encounter issues with data quality and transparency. Swoop Funding suggests practical steps for founders to build credit profiles early and advocates for systemic reforms in credit models. Cultural perceptions of business borrowing also need to shift to support entrepreneurs effectively, especially women and underrepresented founders.
The outdated business credit scoring models are shutting out promising UK startups from crucial funding, urging a cultural and systemic rethink to match modern entrepreneurship.
Credit scores designed for established firms fail to account for the unique profiles of early-stage companies, leaving many startups unscorable or too risky.
Attempts to modernise scoring through AI and alternative data face data quality and transparency issues, risking 'new forms of bias' in the process.
Swoop Funding promotes practical steps to build credit profiles early while advocating for systemic reforms to credit models to better support startups.
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