Business Credit Scores Crucial During Economic Crisis

By James Treacy - Publisher StubbsGazette


Touch wood, it appears that the spread of Covid 19 is practically eliminated from the general community, apart from small clusters in certain sectors such as meat processing factories. This is testament to the huge sacrifices that have been made by everybody over the past 3 months.

Now the truly hard work begins as we resurrect an economy that was forced into hibernation because of the pandemic. Business owners will have many challenges over the coming years and now more than ever, it is crucial to keep a very close eye on their company’s credit score.


Covid 19 Impact on Corporate Credit Scores

The economic fallout from Covid 19 is apparent to everyone, with some sectors more severely impacted than others. Even within sectors there are huge disparities for sub-sectors, an example being a grocery store which is currently considered an essential business, compared to their retail neighbour who operate a bar which has been forced to shut down, and not likely to be allowed to return to full capacity for quite some time.

Predicting the Covid 19 Impact for all 18 Sectors is further complicated by the need to drill down into the 1500 Standard Industrial Classification (SIC) Codes, and to closely examine the supply chains and customer network of the individual sectors and business’s.

This will have an obvious impact on the business’s ability to trade normally, get approved for loans, lines of credit or even to negotiate with landlords or insurers.


Reengineering Existing Scorecards

The StubbsGazette corporate scorecards are based on data we gather from

  • Company filings
  • Court and other publically available records
  • Media
  • Collection Agencies
  • Suppliers

Historically, the current pass mark enabled Stubbs to identify over 80% of all corporate failures from the bottom 20% of scores and already we know that this scorecard pass mark has increased significantly since the pandemic outbreak and we have readjusted our scorecards and algorithms accordingly. These by their very nature are extremely flexible and constantly change as economic circumstances dictate in this extremely volatile environment.

The credit score, essentially measures financial resilience and regardless of the business sector a firm operates in, it will be the most financially resilient that will last longest, and the financially flimsy that will fail first. If a company’s gearing was on the high side and liquidity was poor when everything was good, it is going to be overly leveraged and liquidity will have gone critical in the post pandemic world, and this is the kind of thing that is reflected in the scorecard.

Alongside this we are developing a dual Covid 19 Industry Score taking into consideration all the factors described above and expanding our datasets to include CSO and other reliable sources.


Importance Of A Good Credit Score During An Economic Crisis

After the last economic meltdown in 2009, President Obama’s former Chief of Staff, Rahm Emanuel said that you should “Never Let A Good Crisis Go To Waste.” I wonder what he would have to say today as we are going through a second once in a lifetime global economic meltdown in the space of 11 years.

Many businesses who survived the first crash will struggle both financially – and emotionally - to deal with this latest catastrophe. Some may even decide to throw in the towel and opt to wind up their businesses voluntarily, rather than investing personal wealth which they have rebuilt since the last crash.


On top of that, there is likely to be widespread corporate insolvencies in the SME sector as a result of the fallout, both foreseen and unforeseen over the coming years. We do not yet know the scale of the carnage or which sectors are likely to be hit hardest, although many are predicting the hospitality and retail (apart from grocery) sectors are going to be the worst affected.


It is more important than ever to maintain a good credit score as banks and creditors will inevitably tighten their credit appraisal policies. A good credit score will give you leverage to negotiate with suppliers, lenders, landlords and insurers which may result in more favourable credit terms, rents or premiums. Needless to say businesses with an impaired credit rating will not have this in their armoury in the challenging times ahead.

One thing is for sure, and Mr Rahm would probably agree, is that there will be opportunities to take advantage of due to pent up demand and less crowded markets as the economy recovers. This could happen very rapidly, with some economists forecasting a V-Shaped recovery. But it is only business’s with good credit ratings who will be able to maximise these opportunities.

Top Judgments Registered


Szymon Bondyra
Address: Peachville Lodge, Kilshane, Dublin 11
Amount: €133,495.86


Elite Performance Strength & Weight Loss Limited
Address: R/o 27 Cook Street, Cork
Amount: €118,049.12


MPK Bars Limited
Address: R/o 76 Western Business Parkway, Block 5, Ballymount, Dublin 12 D12 R156
Amount: €94,733.41


Declan Cullen
Address: 13 Urrin Valley, Enniscorthy, Co Wexford
Amount: €89,006.35

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