Benchmarking

Benchmarking allows lenders to contextualize a business’s performance by comparing its financial metrics, such as revenue, expenses, and fintech debt activity, against anonymized peer groups within the same industry. This capability leverages Ocrolus’s extensive SMB dataset by offering a new perspective through which underwriters can interpret raw cash flow data.

With Benchmarking, lenders gain percentile-based insights into how each merchant performs relative to other businesses in the same naics4_code (North American Industry Classification System) industry and timeframe, unlocking competitive intelligence and decision support that were previously unavailable in SMB lending landscape.

It gives underwriters a simple, visual way to answer questions like:

• Is this revenue level high or low for this type of business?
• Are these expenses normal?
• Is this fintech borrowing activity consistent with peers?

By surfacing this insight directly inside the Dashboard, underwriters can make more informed decisions without manual research, external data, or statistical expertise.

Feature overview

Benchmarking appears as an interactive chart in the Ocrolus Dashboard under the Ocrolus Intelligence (OI) tab. The benchmarking advantages include:

• Contextualize borrower performance: Benchmark a business’s revenue, expenses, and fintech inflows and outflows against thousands of peers in the same industry and month, helping assess financial health in relative terms—not just absolute numbers.
• Enhance underwriting with percentile analytics: Percentile ranks (e.g., 80th percentile in revenue) allow underwriters to quickly determine whether a borrower is outperforming, underperforming, or in line with peers—streamlining decision-making and highlighting outliers.
• Backed by real-world SMB data: Benchmarking insights are derived from Ocrolus’ unique dataset of small business financial activity—aggregated across thousands of anonymized businesses—enabling clients to gain comparative intelligence unavailable through other sources.
• Powered by robust infrastructure: Benchmarking leverages datasets built from millions of SMB transactions, ensuring scalable and low-latency percentile calculations across key metrics.

The benchmarking screen on the Dashboard includes the following components:

• Header bar: Allows users to select the metric and view the associated industry.
• Industry benchmark curve (peer distribution chart): Visualizes the distribution of peer performance for the selected metric.
• Merchant marker (your merchant’s position): Indicates where the merchant falls within the peer distribution.

Header bar

At the top of the chart, you can quickly confirm the merchant’s peer group and select the metric they want to evaluate. This helps you focus on the right comparison without needing to interpret raw cash flow numbers in isolation. This section contains the following details:

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Tip

If you’re not sure where to start, begin with Average revenue / month to get a quick sense of overall business strength before exploring expenses and fintech activity.

Industry benchmark curve

The benchmark curve is the core of the feature. It provides a simple, visual view of how businesses in the same industry typically perform, so you can quickly understand what it looks like before evaluating the merchant. Also, you don’t need to interpret percentiles mathematically. These markers are simply visual guides to help you understand how the merchant compares to similar businesses. This section shows the following details:

Tooltips (hover details)

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Example tooltip

• Revenue range: $15K–$20K |Percentile range: 10th–18th |Peers: 7%
• Use this information to quickly understand how common a performance level is within the merchant’s industry.

Merchant marker

The red marker highlights where the merchant falls within the peer distribution. It helps you quickly understand whether the merchant is performing below, within, or above the typical range for similar businesses. The section contains the following details:

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Example marker label

$152,376 — Higher than 77% of peers. This gives you a clear, actionable takeaway without needing to interpret the full curve.

Boundary cases

To ensure the merchant is always represented on the chart, benchmarking uses the following labels when the merchant falls outside the typical peer range, making it easier to recognize extreme outliers at a glance:

• Below the 5th percentile: < 5%
• Above the 95th percentile: > 95%

Using benchmarking for underwriting

Benchmarking helps you interpret a merchant’s cash flow in context and make faster, more confident decisions, especially when the raw numbers alone don’t tell the full story.

• Get instant industry context: Quickly see whether the merchant’s revenue, expenses, and fintech activity are typical for their industry or fall outside expected ranges.

• Spot unusual patterns early: Identify outliers such as unusually high expenses or elevated fintech borrowing activity that may warrant a closer review.

• Support decisions with peer data: Use percentile-based benchmarks to strengthen approval or decline decisions with objective, industry-relative comparisons.

• Build confidence in edge cases: Benchmarking is particularly helpful when evaluating:

  • seasonal businesses
  • merchants in small or niche industries
  • new merchants with limited operating history
  • merchants with volatile month-to-month activity

• Reduce reliance on guesswork: Instead of relying only on intuition or experience to define what’s normal, you can use peer benchmarks to guide and validate your assessment.

Supported metrics

The following metrics are benchmarked based on 4-digit NAICS industry codes:

• Revenue
• Expenses
• Fintech Inflows
• Fintech Outflows

Benchmarking via API

Use the Benchmarking API to programmatically retrieve retrieve benchmarking percentiles for SMB Book.