Dun & Bradstreet’s new Viability Rating is quickly becoming one of the first things lenders and vendors check when deciding whether your business looks “fundable”—and most owners don’t realize how much this score can influence approvals until they’re already facing a denial. In this post, you’ll learn what the D&B Viability Rating is, how its four parts (Viability Score, Portfolio Comparison, Data Depth Indicator, and Company Profile) are calculated, and the practical steps you can take to strengthen the data behind your profile so your company is judged on its true creditworthiness—not on missing or outdated information.

Many lenders and creditors who rely on D&B analytic data are putting more emphasis on their new viability rating when determining creditworthiness. Unlike the D&B rating most people are familiar with, the new D&B Viability Rating breaks down a company’s creditworthiness and risk into 4 easy-to-understand scores: two numbers, followed by two letters.

The Viability Rating encompasses 75 major creditworthiness factors and rates your business under four separate scoring models: Viability Score, Portfolio Comparison, Data Depth Indicator, and Company Profile.

The first number is the Viability Score. It assesses the likelihood that a company will go out of business within the next 12 months. This compares your business to all other US-based businesses within D&B’s database.

• The business is rated on a scale of 1 to 9 with 9 being highest risk and 1 being lowest risk. You will want your score to be as close to 1 as possible.

The second number is the Portfolio Comparison score, which details the creditworthiness of your business compared to similar businesses within the same industry, size, and location, depending on how much actual data D&B has on your business in the following four categories

• Available Financial Data

• Established Trade Payments

• Limited Trade Payments

• Firmographics and Business Activity

• The business is rated on a scale from 1 to 9 with 9 reflecting highest risk and 1 being lowest risk. You will want your score to be as close to 1 as possible.

• READ: The Two-Minute Miracle

The next set of indicators in the D&B Viability Rating is a letter that represents a Depth of Data Indicator, an assessment of the quantity and depth of the data that D&B has in it’s database about your business, the data they used when calculating the above two scores. The business is rated on a scale that represents whether the strength of the data is based specifically about your business (solid or “predictive” data) or upon an average of other businesses in your same industry, size, and location (limited or “descriptive” data). Data comparison is judged in the following categories:

• Financial Attributes

• Commercial Trading Activity

• Firmographics

• The business is rated on a scale ranging from A through G, with A reflecting “predictive” data and G reflecting “descriptive” data. You want your score to be as close to A as possible.

• READ: D&B's New Trade Reference Submission Process

The last indicator, the Company Profile score, combines the 4 categories below to quickly define your business to potential creditors or lenders. The score is based upon the following factors:

• Financial Data

• Trade Payments

• Company Size

• Years in Business

• The scale for comparison is A through X, with Y and Z for subsidiaries and branch locations. While every business strives to eventually be ranked as an A (in business 5+ years, with 50+ employees or $500K+ in Sales), the goal is to make sure the data in your D&B profile most accurately defines your business’s current condition so you can be ranked according to your actual strength and worth.

• READ: The Invisible Score: A Small Business Owner’s Guide to Monitoring and Maintaining Business Credit

You can better represent your company's worth by submitting Financial Statements (both Profit-and-Loss and Balance Sheet) to D&B for consideration. Privately held businesses are not required to submit Financials, but doing so can help to bolster a sagging Financial Stress Score. You can submit Financials using D&B's free D-U-N-S Profile Manager.

It is very important that you understand your company’s overall creditworthiness and the factors that impact your approvals. If you would like to discuss The D&B Viability Rating, please reach out to schedule a free one-on-one consultation. Perhaps we can help you influence the new rating to best benefit your business.

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