Experian Commercial Acumen allows small businesses to skip much of the paperwork required to apply for a loan, and instead share bank transaction and management account information with a lender within minutes.

Lenders typically require three months of bank statements and the latest management accounts.

It can take small businesses up to three months to collate the information they need, including input from their accountant, while lenders must then manually analyse the documents to ensure the business meets its criteria. Additional information may still be required.

Experian’s solution allows a lender to set up an application in five minutes, while a business can share its data in 10 minutes.

The bank statement is made available instantly to the lender in a secure portal, in a standard format which is ready to be analysed.

Small business accounting data will also be added to Commercial Acumen in the coming months through a partnership with Codat, a fintech which allows lenders to receive up-to-date, accurate contributed accounting data from their small business customers through a single API.

Lenders of all sizes can use it to offer a round-the-clock service for small businesses, who often want to make applications outside of normal office hours.

The digitalised process verifies the identity of the applicant and meets the needs of compliance. Fraudsters have attempted to falsify bank statements and management accounts in the past, but Experian Commercial Acumen pulls information direct from the source to reduce the risk of fraud.

Lisa Fretwell, Managing Director of Data Services at Experian, said: “The manual, paper-based method of applying for finance is archaic and laborious for both lenders and SMEs. Small business owners are often time-poor and only get the chance to fill out a funding application in the evenings, when many lenders are closed for business.

“Commercial Acumen can help SMEs get an answer from a lender in days, not months. It will help challenger lenders to offer an always-on service, so they can securely receive documents 24 hours a day in a format they can quickly get to work with.”

Alex Cardona, Co-founder of Codat, said: “With Commercial Acumen, Experian has put itself right at the forefront of the market in delivering contributed data on small businesses, which is unequivocally the future of small business lending.”

Open Data and accounting are secure ways to give providers access to your financial information. It opens the way to innovative new products and services that can help customers and small to medium-sized businesses get access to more dynamic services and better deals.

Experian has already allowed credit card and auto finance providers, rental property agencies, mortgage lenders and gaming companies to better assess whether services are affordable for their customers. This is its first service to help lenders better understand and service small businesses using Open Data and accounting data.