Understand the topic
What this means in daily life
Cash-flow based lending asks whether a business can reasonably meet repayments from the money it earns. The source brief proposes looking beyond property offered as security to business records such as invoices, purchase orders, transactions and repayment history. These records need context: a sales invoice is not the same as money received, and a large order is not a guaranteed future payment.
The research question is how a lender supervised by the relevant financial authority could assess a small firm's real business activity while protecting its privacy and giving it a fair explanation. The proposals below are for institution-led testing. They do not recommend a loan, decide eligibility or replace a lender's professional assessment and current regulatory duties.
Data reference table
Evidence Snapshot
Read each value with its reporting period, population and limitations. A historical national reference is not a local baseline or proof that an IFT proposal works.
5 measurement records still need data and a review of their relevance.
| Signal | Reference Value | Period / Population | How to Read It | Source Status |
|---|---|---|---|---|
| Safe and active access | Not established Data required — not zero | Reporting period: Information Required Population and geography: Information Required | Proposed measure; no observed value is established here. Limitations: Define the measure, unit, reporting period and covered population; obtain a traceable dataset and review its suitability for this topic before using a number. | Source organisation: Information Required Direct source URL: not yet verified Source publication date: not established Verification status: Data required |
| Affordability and suitability | Not established Data required — not zero | Reporting period: Information Required Population and geography: Information Required | Proposed measure; no observed value is established here. Limitations: Define the measure, unit, reporting period and covered population; obtain a traceable dataset and review its suitability for this topic before using a number. | Source organisation: Information Required Direct source URL: not yet verified Source publication date: not established Verification status: Data required |
| Shock resilience and protection | Not established Data required — not zero | Reporting period: Information Required Population and geography: Information Required | Proposed measure; no observed value is established here. Limitations: Define the measure, unit, reporting period and covered population; obtain a traceable dataset and review its suitability for this topic before using a number. | Source organisation: Information Required Direct source URL: not yet verified Source publication date: not established Verification status: Data required |
| Productive capital and payment reliability | Not established Data required — not zero | Reporting period: Information Required Population and geography: Information Required | Proposed measure; no observed value is established here. Limitations: Define the measure, unit, reporting period and covered population; obtain a traceable dataset and review its suitability for this topic before using a number. | Source organisation: Information Required Direct source URL: not yet verified Source publication date: not established Verification status: Data required |
| Complaint, fraud and recovery outcomes | Not established Data required — not zero | Reporting period: Information Required Population and geography: Information Required | Proposed measure; no observed value is established here. Limitations: Define the measure, unit, reporting period and covered population; obtain a traceable dataset and review its suitability for this topic before using a number. | Source organisation: Information Required Direct source URL: not yet verified Source publication date: not established Verification status: Data required |
Different surveys, administrative records, estimates and reporting years are not interchangeable. No combined IFT score is calculated from these rows.
Evidence coverage and review log (CSV) · Structured evidence register (JSON)
10 ideas for this topic
What could be done — and what needs testing
These are proposals for research and local testing. They are not claims that a project has been funded, implemented or proved successful.
Separate sales from collected money
Test a simple business statement that lists invoiced sales, payments received and overdue amounts separately. Let the owner correct mistaken entries before assessment.
What to check: Compare the statement with authorised records and identify missing cash transactions without treating every gap as wrongdoing.
Show seasonal trading patterns
Ask participating firms to explain busy months, quiet months and purchase cycles alongside dated business records. Test whether a short snapshot gives a misleading picture.
What to check: Check the length and completeness of the record and whether unusual months dominate the proposed assessment.
Record the cost of completing an order
Build a voluntary worksheet connecting a confirmed order to materials, wages, delivery costs and expected payment timing. Distinguish confirmed information from an owner's estimate.
What to check: Check whether the order can be delivered profitably and what happens if payment arrives later than expected.
Let firms correct their own records
Test a review screen that shows the business records used in an assessment and a route to dispute mistaken or wrongly matched information.
What to check: Check whether corrections reach the responsible reviewer and whether decisions are reconsidered when a material error is confirmed.
Use only necessary business information
Ask the lender to list each proposed data item, its purpose, who can see it and how long it would be kept. Remove fields that do not serve a defined assessment purpose.
What to check: Review consent, security, current legal obligations and whether owners can understand what information is being requested.
Explain the main reasons for a decision
Test short explanations that distinguish an incomplete application, unverified information and an assessment of repayment risk. Give owners a contact for questions.
What to check: Ask owners to explain the decision back in their own words and check that the explanation matches the actual review record.
Compare treatment of different business types
Review whether proposed data requirements disadvantage very small firms, seasonal businesses or enterprises with limited digital records. Use appropriately protected grouped findings.
What to check: Check the reasons for unequal outcomes rather than assuming every difference proves unfair treatment. Restrict access to identifiable records and check whether small public totals could reveal a firm.
Test payment-delay scenarios
Ask the lender to examine how realistic customer delays or higher input costs could affect repayment capacity. Show assumptions separately from observed trading records.
What to check: Review whether the scenarios fit the firm's market and avoid presenting one forecast as a certain future.
Offer an assisted application route
Test help with understanding fields and organising business documents, without allowing the helper to invent figures or pressure the owner into borrowing.
What to check: Check helper incentives, charges, confidentiality and whether the owner understands each submitted statement.
Review business outcomes after disbursement
With permission, study repayment difficulties, fees, business cash flow and complaints over a defined follow-up period. Include firms that stopped participating.
What to check: Check whether reported business improvement can reasonably be linked to the lending change rather than unrelated market conditions.