In light of the recent devastation impacting millions due to Hurricane Harvey, I thought I would repeat the information I've previously provided on this subject for those who may soon face yet another potentially catastrophic loss: their corporate credit scores.
History has proven that businesses can be dramatically impacted by factors that are far outside their control. Natural disasters can play a huge role in a company's credibility. That's why, when generating scores and ratings based upon the amount of risk your business can sustain, D&B looks at 75 factors that impact your financial strength, longevity and credibility.
But D&B's credit risk analysis can sometimes be equally devastating. We've seen it happen after the BP oil spill in the Gulf, and after Hurricane Sandy hit the Jersey shore, and after earthquakes, fires, and other natural disasters. And it is certain to happen as Hurricane Harvey moves on and eventually dissipates...
You see, D&B has been rating businesses for 180 years. They know from experience that businesses that lie within the zone of impact, in this case a 50 county area of Southeast and Central Texas, are going to face struggles that businesses just 100 miles away will not.
At some point soon, D&B is going to place a notation into the corporate credit report of every business located in the impact zone to let their suppliers and creditors know that this businesses may now be at a higher risk of failure due to the effects of Hurricane Harvey. And they are going to do that for every business, even those that escaped a direct hit.
They do this because they know this tragedy is going to reach far beyond the building's brick or wood facade. Employees may not be able to come to work, supply lines may be cut for months, current inventory may be compromised, and utilities may not be back to operational for weeks.
But D&B also knows that other businesses, some located thousands of miles away or around the globe, could also be dramatically affected, simply because they rely on these corporate communities in order to run their own businesses — whether that's infrastructure, staffing, individual employees, supply lines, transportation, or business systems.