SBR Credit Reporting: Who Benefits?

Most people think that when their lender asks to provide the financial data via Standard Business Reporting (SBR), that is the annual statement. However, that is not so. In order to assess a credit application or a revision, the banks will ask for the SBR credit report instead of the annual accounts from 2017 onwards.

The banks ABN Amro, ING and Rabobank are united in the Financial Reports Cooperative (FRC). During the development and implementation of SBR, the opportunity was cleverly used to request additional information. You are not done with simply submitting the annual accounts. You should also answer additional questions. For example about the breakdown of real estate such as land and buildings, but also an age analysis of debtors and creditors.

Background
Standard Business Reporting originated from the government's wish to reduce the administrative burden for entrepreneurs. Companies in the Netherlands have to submit many mandatory (financial) reports every year to banks and governments, among others. That costs time, money and energy. The government has developed SBR together with accountants, software suppliers and banks.

With SBR, the data in the business administration is recorded once in a standard manner. Reports are drawn up and sent digitally to the various parties at the touch of a button. For example, entrepreneurs and intermediaries have less work to do on compiling and submitting the various (mandatory) reports.

Gas it up
In order to give SBR a significant boost, the government has decided that from 2017 the submission of the annual accounts to the Chamber of Commerce via SBR will be mandatory. In addition, the banks are strongly encouraging its use. In practice, this means that if you do not submit a credit application via SBR, additional costs may be charged. This is told as: "From 1 July, entrepreneurs will receive a €250 discount on the closing commission if they provide the necessary data via SBR when applying for financing."

Benefits
The advantage for entrepreneurs should be that with a few pushes on the button you can also provide other banks with your credit report, in addition to your house bank. Requesting different quotes quickly and easily becomes possible. And banking with various banks becomes technically easier when the information is uniform.

This allows further implementation of the automation of processes, such as the mandatory annual revision of annual accounts. Credit applications can also be processed more easily and quickly. This will ultimately have to lead to lower costs and a fast, efficient working method.

Behind the scenes
Suppose you now submit your data via SBR credit reporting. What happens to your bank then? Practice shows that for the majority of agricultural companies, after supplying the data, a bank employee has to manually convert the documents "behind the scenes" into the applicable banking system. Then they can be processed further.

Requesting different quotes quickly and easily is currently not yet possible for the majority of agricultural entrepreneurs. Despite the fact that work has been going on since 2009 on the development and implementation of SBR, I unfortunately have to conclude that in practice it has not yet been benefited much.

For you as an entrepreneur, in the short term, this means an increase in the burden rather than a reduction. And the benefits, you'll have to wait a while for that. Yet I expect in this “patience is a virtue”, so take courage and let time do its work. 

Peter Pals

Peter Pals is an entrepreneur at Farmers Funding & Advies and grew up on a farm. From his farming heart, he has decided to build up a business for business, financial and tax advice for agricultural entrepreneurs.

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