A commercial credit bureau keeps the credit record of businesses, so that a lender or a supplier can check how a company has borrowed and paid before giving it credit. It works like a consumer credit bureau, but its files are about companies and firms, not people.
The record holds two kinds of data. The first is the business's loans: every term loan, overdraft and working-capital limit from banks and NBFCs, and whether each payment was on time. In India, lenders report these loans to the same credit information companies that keep the records of individuals. The second kind is trade data: how quickly the business pays its suppliers' invoices. Some commercial bureaus also collect company filings, court cases and GST data.
The bureau turns this record into a score or a rank. For example, CIBIL gives micro, small and medium enterprises (MSMEs) a rank from 1 to 10, where 1 means the lowest risk. A lender uses this rank alongside the owner's personal credit score, because a small firm and its owner are closely linked.
Say a furniture maker in Jodhpur applies for a loan of ₹15 lakh for working capital, the money a business needs to buy materials and pay wages before its customers pay. The lender checks the commercial bureau. It finds an existing cash credit limit of ₹10 lakh, always paid on time, and an MSME rank of 3. It also checks the owner's personal score, 760. The firm qualifies, and the lender sets the interest rate based on the risk.
Suppliers check businesses too. In India, the credit information companies give their reports only to their members. These are lenders and a few other kinds of user approved by RBI, such as insurers. So a supplier usually buys a business report from a business information company instead. Before selling ₹5 lakh of timber on 60 days' credit, a timber supplier can check whether the furniture maker pays its other suppliers on time.
The data matters most for MSME loans, because many small firms have few documents. It is also checked in invoice discounting, where a financier pays a supplier early against an unpaid invoice. There, the financier checks the buyer that will pay the invoice. All of this is part of MSME lending. Large companies and their bonds are graded by a credit rating agency instead.