- 1Hansa lets lenders report SMB payment history to business credit bureaus and pull existing reports.
- 2Its CEO cites a survey in which 85% of owners prefer lenders that report.
- 3Reports furnished by Hansa are up more than 400x since the start of the year.
A small business borrows from a fintech lender, repays on time, then applies elsewhere expecting that history to help, only to find no public record of it. Hansa, a New York City company, is trying to fix that by letting lenders report payment history to the credit bureaus and access existing reports on their customers.
Founder and CEO Henry Magun says the experience is common. His company is building the back-end pipes to furnish data to the bureaus, plus a front-end product that makes the process transparent for small businesses. In Hansa's surveys, he said, 85% of business owners prefer borrowing from a provider that reports to the business credit bureaus.
What it covers
This is business credit reporting, not personal. Dun & Bradstreet, Experian and Equifax each run business bureaus, and consortium-based groups such as the Small Business Finance Exchange also collect commercial credit data. Hansa focuses on term loans and cards, two fast-growing fintech products, but says the platform can handle nearly any product, including MCAs and daily, weekly or monthly payment structures.
Why lenders care
Lenders can show that good performance builds business credit, and borrowers benefit from actually building it. Lenders can also use the data for underwriting. Today, understanding a borrower's payment performance with other fintech lenders is largely guesswork: some lenders scan bank deposits and match them against known lender names to infer account status, but this is not an official lender confirmation, may not reach back far enough, and gives the business no portable asset. A credit report could be used for a trade line or bank loan.
Magun called it a rising-tide scenario in which wider reporting helps funders underwrite and gives applicants portable credit history. He also framed furnishment as part of financial wellness and economic mobility, helping borrowers graduate to bank products.
85% of business owners say that they would rather borrow from a provider that does report to the business credit bureaus.
Early results
Hansa has increased the number of reports it furnishes by more than 400x since the start of the year. Lenders can show borrowers what they report and where. Magun said the company is seeing improved payment rates and higher engagement between borrowers and lenders.
Source reporting: deBanked.
