How much can you expose to a customer? The MORE Credit Limit calculation 

MORE Credit Limit: what is the Credit Limit and how to obtain it on s-peek.

When evaluating new customers, it is essential to consider the amount of credit risk you decide to take on with them: it is fundamental to determine the Credit Limit. 


This refers to the maximum recommended exposure to customers when granting a payment extension. It is essential to know how much the company is exposed to the risk of default by the creditor, as the risk that the creditor will not be able to repay its debts, and therefore to determine how much exposure is acceptable to limit the risk of loss.

Using Public Data to calculate the credit limit

Different values could be assigned to the same company, as there are various procedures to calculate the credit limit. There are also customized calculation models, usable only when private data are available, that can take several factors into account, such as:

  • Invoice analysis;
  • The payment history;
  • The importance of that specific customer for the company.

The evaluations elaborated by s-peek to calculate the credit limit are based exclusively on companies' public data. s-peek works with an algorithm that collects financial data and companies' information from the Chambers of Commerce, providing a quantitative judgment on the economic-financial situation of the company, which is fundamental to obtain the value of the credit limit assigned to that company. On s-peek it's possible to find the indication of the credit limit within the Flash or Extended12M reports under the heading of MORE Credit Limit (from Multi Objective Rating Evaluation), which takes its name from the methodology developed by the Rating Agency modefinance for the calculation of Credit Rating.

So how is the credit limit calculated on s-peek?

As s-peek does not have private data on a company, it uses various parameters to calculate the credit limit, including:

Rating MORE

The first fundamental parameter for calculating the credit limit is the company's rating. It is necessary to calculate customers' soundness and the likelihood of default (the higher the rating, the lower the probability of default). In addition to the total MORE rating, the score assigned to the area of solvency is also taken into account, indicating whether the company has sufficient resources to meet its financial and commercial debts.

The liquidity of the company

The more liquid a company is, the greater the amount of cash it has available to meet its short-term debts; consequently, a good liquidity score reduces the likelihood of late or non-payment.

Company size

The company's size depends on the turnover and number of employees: the larger the company, the higher the commercial credit line will tend to be, as the company will have more resources at its disposal.

Years in business

The years a company has been in business indicate its ability to withstand market fluctuations. A company that has been in business for many years, for example, demonstrates greater resilience.

Cost and average number of suppliers

The analysis of suppliers is a relevant factor in calculating the credit limit. It tends to be the case that the more suppliers a business has, the less it can borrow from each. Consequently, it will be advisable for the individual supplier to have less exposure and grant a smaller credit limit facility. The average number of suppliers of a company can be determined statistically through the rudiment of Pareto, from the production costs reported in the balance sheet. This principle states that 20% of the causes give 80% of the effects. Therefore, 20% of suppliers will provide 80% of total supplies or, in other words, 80% of the costs derive from only 20% of the suppliers. Once obtained prices of the largest suppliers, it is also possible to determine the average number of suppliers by employing a sector analysis.



s-peek is a modefinance's technology and boasts a tested and advanced calculation methodology for the credit limit based exclusively on data available in the Chamber of Commerce and allows even small businesses and freelancers easy access to an immediate estimate of the maximum recommended exposure to each customer.

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