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Red Flag Alert gives you a clear view of over 6.5 million UK businesses, showing detailed information on each business and the people running them. With 142 indicators of financial health, the unique insolvency algorithm gives you early warnings on companies that are experiencing distress.
This information is updated daily and delivered to your team in real time, allowing you to take the necessary steps to mitigate risk.
There is a significant amount of bad debt in small businesses that are not required to file accounts –not only is Red Flag Alert able to predict the turnover of these companies, but has developed a scoring card based on market-leading data sources and enriched by creditor services data that can accurately predict insolvency risk for any size of company.
Their health rating algorithm not only scores companies that are required to file accounts but also smaller businesses that aren’t obligated to file detailed financials, meaning you always have a reliable credit profile for whatever size of business you deal with.
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Their health rating algorithm not only scores companies that are required to file accounts but also smaller businesses that aren’t obligated to file detailed financials, meaning you always have a reliable credit profile for whatever size of business you deal with.
GOLD – These are the top-rated companies and carry the lowest risk of becoming insolvent. The chance of a Gold company failing is less than 0.1% and Gold companies make up between 12–14% of all UK companies at any given time. SILVER – Silver companies, while not as strong as Gold, are solid companies representing a low risk and have a low chance of becoming insolvent. These companies are still very unlikely to fail but are less financially stable than Gold companies. Silver companies make up around 25% of UK companies at any given time. BRONZE – Bronze companies have passed our scorecard and are deemed as healthy, but are in the lowest band to have done so. These companies still have a low chance of failure but are less financially stable than Gold and Silver. Between 35–40% of UK companies will be Bronze rated at any given time.
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1 RED FLAG – Companies rated with 1 Red Flag have a much higher chance of failure than Bronze companies and represent a moderate risk. A 1 Red Flag company may be in the process of an ongoing downward slide into insolvency or may have held a 1 Red Flag rating for an extended period of time. 1 Red Flag companies are among the weakest 20% of UK companies.
2 RED FLAG – 2 Red Flag companies have a high chance of failure and represent a significant risk. While a 2 Red Flag company may be able to trade back to financial health they are more likely to fail. Any credit offered is done so at extreme risk. There will likely be evidence of recent and/or significant legal notices. 2 Red Flag companies are in the weakest 20% of UK companies.
3 RED FLAG – 3 Red Flag companies represent the most significant financial risk and are on the verge of being declared insolvent. There are likely to be recent and/or significant legal notices, recent and/or significant County Court judgments and will have a deteriorating financial position. No credit should be extended. 3 Red Flag companies make up the weakest 1% of UK companies.
PROVISIONAL RATINGS – Provisional ratings can be applied to Silver, Bronze, 1 Red Flag and 2 Red Flags when a company has only one set of filed accounts. Any company with a provisional rating should be considered as slightly more of a credit risk than a company with the equivalent non-provisional rating.
NEWLY INCORPORATED – These companies are newly incorporated and have not filed accounts and, as such, we do not have the data required to score them, and they remain in this holding rating until the point at which they have the information necessary for them to be scored.
PRE-INSOLVENT – Pre-insolvent companies are usually in the early stages of formally declaring or being declared insolvent and in 98% of circumstances will fail within 28 days. This rating is a precursor to insolvency and, as such, we would not recommend offering credit in any circumstance.
Monitoring
Red Flag Alert enables you to set up alerts so that you are notified straightaway if there are any significant changes to a client’s financial health. As well as monitoring your direct clients, you can watch those further down the supply chain – for example, where a client is operationally reliant on a specific supplier or customer. This could alert you to any problems your clients may face in the future.
Anti-Money Laundering (AML)
AML policies, which include ‘Know Your Customer’ (KYC) checks, play a pivotal role in preventing money laundering, identity theft and fraud. AML compliance is a legal requirement.
Red Flag Alert’s AML Service has:
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