risk assessment process

At Beehive, we only allow established creditworthy businesses onto our platform and our experienced credit assessment team undertake robust and rigorous risk checks on all businesses that apply for listing on the platform in addition to obtaining all necessary legal documentation as part of our assessment.

 

Each business undergoes an internal risk assessment supported by robust third party on site verification. Only successful businesses will be listed on the Beehive marketplace.

 

Each finance request is given its own rating based on a multiple number of data points which contribute towards an overall risk band. We look at both quantitative and qualitative measurements, including revenue growth, profitability, strength of management team and sector competitiveness. We have our own proprietary risk model which is supported by an internationally recognized, external party who carries out our field verification visits. The metrics which are provided on the platform are a summary of the multiple data points we review during our risk assessment process.

 

Risk ratings are determined based on how the company scores on the hundreds of data points that make up our 6 risk criteria:

 

 

 

RiskChart
Company: Assessment, review and risk scoring of the company’s management team, their relevant sector expertise and performance to date, coupled with the strength of the company’s infrastructure, the desirability of its products and services, and relationship with it’s key customers and suppliers.

 

Financial Strength: Assessment, audit and risk scoring of the company’s financial strength, including repayment coverage, revenue growth and net profit performance, scored against key financial repayment ratios.

 

Payment History: Companies’ payment history as scored by using bank statements and third party agencies, taking into account evidence of unpaid cheques for insufficient funds, the number defaults and late payments on monthly loan repayments, and any police cases filed for non payment. The timeline and amounts of when these payment irregularities occurred are also taken into account.

 

Commitment: Evaluates the business owner’s commitment to their company including initial share capital, and subsequent personal monies injected, levels and type of current external debt commitments, impact to the company in respect of related party commitments and any potential flight risk exposure.

 

Industry: Assessment and benchmarking against local market share ranking and peer rating status. This also includes comparable pricing of products and services against peers operating in the same markets, and economic status of sector such as growth, maturity and decline.

 

External Verification: Audit of external sources including credit reference agencies, key social media platforms, recognition for industry awards achieved, such as Dubai SME100, membership to professional organisations’ and publicly listed qualifications of both the company and business owners.

 

Although we undertake detailed risk checks and only allow creditworthy business to apply for finance on our platform, no investment can ever be entirely risk free and even creditworthy businesses may default. A fundamental principle of Beehive is that we always encourage our investors to diversify their investments across multiple businesses to lower their risk of capital loss.