13 May AI-Based Credit Technology for Small Business CFOs

Posted at 09:40h in Blog by

PPL has for the last year utilized the services of Wiserfunding, a UK-based AI-tech firm that has licensed the famed NYU professor Dr. Ed Altman PhD’s Altman Z-Score for assessing credit quality in corporate borrowers. We should add that PPL is a proud friend of Dr. Altman (re-introduced to us by one of our esteemed board members, Dr. Arturo Cifuentes, who was previously a Columbia University professor and a senior executive with Moody’s Investors Services).

Wiserfunding, in working with Professor Altman, has fine-tuned the formula developed over 50 years ago to apply to smaller private companies, the types of companies that PPL focuses on lending to. While PPL has its own internal, complex and proven credit rating system, we use the enhanced Wiserfunding model as part of our confirmation of our independent assessment of each borrower’s credit standing.

We further benefit by being able to refer to the long-term, third-party objectivity of the Wiserfunding technology to add significant credibility to the way PPL grants credit and the manner we track our portfolio exposures, giving our investors and capital providers even greater comfort in our processes and procedures.

For a brief overview video on the basics of the original Altman Z-Score and an Investopedia article, click here.

Borrowers and their CFOs may want to experiment with the formula and over time evaluate how their firm is progressing on the Altman scale. Realize of course that customization will be necessary for smaller, private firms just as the Wiserfunding people had to do. Similarly, different industries and non-manufacturing firms will have to make adjustments as well.

Self-analysis of one’s own financial statements can be a healthy endeavor, if not for a single output then for observing trends over time, for any firm in its pursuit of financial as well as operational excellence!

Should you have any questions, we invite you to contact us and explore how PPL can assist you in your entrepreneurial journey.



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