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 “The ability to grab bank data has been a huge benefit to us, coming to us pretty instantaneously and accurately,” says Sherif Hassan, founding CEO of Herio Capital, a small-business lending firm. “It’s been enormous.” With a mix of that technology plus underwriter insight, Herio focuses on measuring the overall health of the businesses that apply for capital.

“We get so much data now,” Hassan says. He’s not exaggerating. The company looks at everything from personal and business credit to bankruptcy and lien information on LexisNexus and personal information on social media to demographic information from Google Maps and city data. Herio is even looking at broader industry analytics, including how particular industries perform, how states stack up in supporting those industries, and how the age of the owner and the age of the business affects payback of loans.

Still, old-fashioned metrics remain part of the mix. “You hear some of the lenders saying, we’re past personal credit scores and we can look deeper than that,” Hassan explains. “And we can look deeper than that. But credit scores are still so important. People who pay their bills pay their bills.”

So once you have all this data in your lap — what comes next?

“The work is in determining which of this data is important to us,” Hassan says. “So we tinker every couple of months: Is this more important? Should we give it more weight in our model? It’s sometimes difficult to separate the signal from the noise, because there’s just so much noise. You can collect 2,000 data points on a customer. But what we really weigh in our model is like 75 of those 2,000.”

But, Hassan’s not content to coast with those. “In the rest of those 2,000, there’s probably 40 or 50 other data points that we’re looking at to see if they’re important ones.”
It may be counter-intuitive to think that data leads to better customer relationships, but that’s exactly the outcome. And Hassan asserts that their relationships with customers are unlike any these small businesses would have with a bank.

“They’re not trying to prove to us that they’re worthy; we already have the data to prove that,” says Hassan. “So because we don’t spend the human capital or human resources on getting the deals done, we spend a lot of our energy on making sure our customers are happy, and our customers continue to make payments.”

For more about what data you need, what innovations are coming down the pike, and how to keep ensuring your portfolio weathers any economy, join our free VB Live event!

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In this VB Live event, you’ll:

  • Get insight into the trends and opportunities driving change in the lending and credit risk management industries
  • Explore more accurate predictive ratings models based on alternative data sets
  • Discover the future of commercial retail lending and credit risk management
  • Learn how to improve credit decisions, collections, and portfolio management using new technologies and data analytics


  • Spencer Robinson, Head of Strategy, Kabbage
  • Sherif Hassan, Founding CEO, Herio Capital
  • Saurabh Sharma, Founder and CEO, Indus Insights
  • Terry McKeown, Practice Manager, Credit Analytics, Envestnet | Yodlee
  • Evan Schuman, Moderator, VentureBeat