Churn Reduction & Portfolio Quality Improvement
The Business
A point-of-sale merchant lender that underwrites and onboards 4,000 merchants per year, with each merchant generating an average of $10,000 in annual loan volume.
The Problem
Approximately 8% of accounts—roughly 800 merchants per year—churned annually, costing the lender approximately $8 million in lost loan volume every year.
This churn was caused by businesses that:
- Became inactive or ceased operations
- Experienced a financial default
- Failed to maintain required licensing
- Were dissolved, suspended, or revoked
The lender had no reliable way to identify which merchants were high-risk before onboarding—and no systematic method for matching loan terms to merchant quality.
The T2C Solution
The lender used Trust2Connect to identify customers with a higher probability of turnover before and during onboarding. T2C's business viability scoring surfaced risk signals that allowed the lender to:
- Prospect higher-quality merchants from the outset
- Match loan terms to the verified quality and risk profile of each merchant
- Reduce exposure to merchants with indicators of instability or inactive business status
The Impact
Outcome: By prospecting higher-quality merchants and matching terms to merchant risk profiles using T2C, the lender meaningfully reduced churn—recovering millions in annual loan volume previously lost to business turnover.
Why It Works
T2C identifies the signals that predict business failure—inactive status, licensing lapses, dissolution filings, and financial distress indicators—before they materialize as defaults or disappearances. The result is a healthier portfolio, better pricing alignment, and a significantly lower cost of merchant turnover.