Overview

Small businesses are the backbone of every economy, yet they continuously struggle to access affordable financing. Traditional lenders face significant challenges in offering fast and secure underwriting for SMEs. Existing credit reports often lack sufficient credit history, making it difficult to generate reliable credit score models for predicting default risks. At the same time, SMEs may not have collateral to mitigate this information gap and secure asset-based financing.

Fortunately, cash flow data is emerging as a powerful alternative to fill this gap. Cleaned, structured, and categorized transaction records offer an up-to-date, comprehensive view of an applicant’s financial behavior, providing key insights into how they manage their financial position on a regular basis.

At Atto, we promote cashflow-based underwriting as a valuable alternative—or complement—to traditional SME underwriting. Through our Financial Health service, we offer a suite of cashflow-related attributes focused on income, expenses, and loan affordability, giving lenders deeper insight into an applicant’s financial health.

Challenges We Help Address

• Assessing Financial Stability

  Understand the applicant’s income inflow, its stability, and whether any volatility exists.

• Identifying Spending Patterns and Savings Capacity

  Gain a clear overview of expenses and determine if the applicant is accumulating monthly savings.

• Determining Loan Affordability

  Assess the applicant’s ability to afford a new loan by analyzing income, spending, and savings patterns.

• Reducing Manual Effort and Saving Resources

  Our automated analysis processes cashflow data in seconds, eliminating the need for manual reviews.

• Comparing Financial Trends Over Time

  Analyze and compare key indicators across various periods—up to one year—to gain deeper insights into financial dynamics.

• Supporting Accurate and Reliable Decision-Making

  Transaction data is pulled directly from the applicant’s bank, minimizing the risk of manipulation and ensuring data accuracy.

• Enhancing Traditional Underwriting

  Cashflow-based insights serve as a valuable alternative or addition to traditional credit assessments, providing a more comprehensive understanding of financial health.

How It Works

We are analysing up to 365 days of transactional data and taking customers current balance as a basis for the calculation. Having processed the raw transactional data we offer the ten most relevant calculations that describe the SME’s income and outgoings patterns.

• In case it is possible to get 365 days worth of data from the bank, then the service will return calculations for all available periods: lastThirtyDays, lastSixtyDays, lastNinetyDays, lastOneEightyDays, lastThreeSixtyDays.
• If data period is less than 365 days (for example 90 days), then service will return calculations for lastThirtyDays, lastSixtyDays and lastNinetyDays. Calculations for all other periods will be equal to lastNinetyDays.
• If the account has had no recent activity then some of the calculations will likely be zero. For example, if there have been no transactions within the past 30 days, then the Total Credit and Total Debit for the lastThirtyDays would be zero. The remaining values will be calculated based on the account balance amount.
• If data period is more than 365 days, then we will return all available periods up to lastThreeSixtyDays.
• To capture the most recent developments and account trends it is recommended to analyze each calculation over all time periods.

API Response Fields

• totalCreditsCount: Total number of all credit transactions over the last X days
• totalDebitsCount: Total number of all debit transactions over the last X days
• totalCreditsAmount: Total amount of all credit transactions over the last X days
• totalDebitsAmount: Total amount of all debit transactions over the last X days
• averageCreditsMinusDebits: Difference between average credit amount and average debit amount over the last X days
• endOfDayBalanceConsistency: Average end-of-day balance amount over the last X days (the mean value)
• endOfDayBalanceLowVal: The minimum end-of-day balance amount over the last X days
• endOfDayBalanceHighVal: The maximum end-of-day balance amount over the last X days
• endOfDayBalanceVariability: Standard deviation of the end-of-day balance amount over the last X days
• percentageOfDaysInNegativeBalance: Percentage of days with negative end-of-day balance amount over the last X days

End-of-Day Balance (EODB) Variability:

EODB variability represents the standard deviation of daily balances over a specific period. A high standard deviation indicates significant fluctuation, meaning the balance is less predictable. Conversely, a low standard deviation suggests a stable and well-managed cashflow, reflecting better financial health at the company level.

API Schema and Response

• Consumer Financial Health
• Business Financial Health

Use Cases

Customers can answer key financial questions such as:

• How much money is coming in?
• How stable is this income?
• Is there income volatility?
• What do the customer’s expenses look like?
• Does the customer have a pattern of monthly savings accumulation?
• Can the customer afford a new loan?

Key Benefits

• Saves Time and Resources

  Our solution removes the need for manual data review. Cashflow-related calculations are processed in seconds.

• Enables Financial Trend Analysis

  Easily compare and analyze key indicators over different time periods—up to one year.

• Supports Accurate Decision-Making

  All transaction data is directly sourced from the end user’s bank, eliminating the risk of manipulation.

• Provides Advanced Insights Beyond Traditional Underwriting

  Use cashflow-based calculations as an alternative or enhancement to traditional underwriting methods for a more comprehensive assessment.