Banks are nearing the end of the line when it comes to implementing credit scoring to wring efficiencies out of the small business lending model, according to preliminary findings of the 1998 Small Business Banking study conducted by the Consumer Bankers Association and Furash & Co.

The number of financial institutions surveyed that use credit scoring as part of the small business lending process has almost topped out: In the 1998 survey, 91 percent of respondents said they used it, compared to 69 percent in the 1997 study. The industry consensus backs the RMT/Fair, Isaac model with 90 percent of respondents employing it. "Last year we saw an enormous focus on trying to get credit scoring in place, this year most of the banks that are going to do it are pretty comfortable with it," says Kathleen C. McClave, CEO of Furash & Co. "And as they've gotten more comfortable, they're increasing the average loan size on which they'll use it."

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