Sageworks PD Model first to incorporate business and guarantor financials

RALEIGH, NC (May 20, 2016)Sageworks, a financial information company that provides loan portfolio solutions to banks and credit unions across the country, continues to expand its credit risk management suite and today announced the launch of its probability of default model.

The Sageworks suite spans the life of the loan, including business development, underwriting, portfolio management and risk management for the institution. With the Sageworks Probability of Default Model, banks and credit unions can now leverage a predictive, objective risk model throughout different stages of the loan.

Sageworks is uniquely positioned to develop a standardized credit risk model for small to medium sized businesses because of its extensive privately held company financial-statement database and relationships with banks and credit unions across the country. By analyzing the historical default behavior of small-business loans and the financial characteristics of both the businesses and their owners prior to default, Sageworks developed a statistically-valid, predictive probability of default model to quantify and standardize credit risk assessments.

The Sageworks Probability of Default Model is different from other risk models in the market:

Global Assessment. For many commercial loans, analysts consider global cash flow and risk to avoid double counting income and debt. The Sageworks PD offers a global assessment for probability of default to assess risk in the total relationship. As a result, this model is the first in the industry to incorporate the financial characteristics of both businesses and their owners. There is an additional business-only model for commercial borrowers where guarantor information is not applicable or available.

Life of Loan Integration. Because the Sageworks suite covers all stages of a loan, the PD model can be applied throughout the life of the loan and not just at decisioning. Bankers can use the PD to pre-screen borrowers quickly without a full financial spread, assign risk ratings, price the loan with competition and profitability targets in mind and flag loans that may require more or less manual review during annual review.

Proprietary, Current Data Set. The Sageworks Probability of Default Model is powered by an updated and growing set of relevant financial and loan loss data that’s used to calibrate the factors and weights used in the model. The data set was built using information sourced from community banks across the country so the model provides meaningful results.

Financial institutions that are interested in using Sageworks PD Model can visit here for more information. For additional risk management resources, or to learn more about the Sageworks suite of solutions, visit

About Sageworks

Sageworks offers banks and credit unions lending, credit risk and portfolio risk software to efficiently grow and improve the borrower experience. By automating the life of the loan with Sageworks, bankers book commercial loans faster and reduce risk. Sageworks uniquely provides integrated solutions and industry expertise to more than 1,400 financial institutions that achieve an average 38% higher loan growth than peers. Visit to learn more.


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