Small and medium-sized businesses play an important socio-economic role in the functioning of the country's economic system. One of the main obstacles to the development of small and medium-sized businesses is the lack of own funds, which exacerbates its need for borrowed resources, first of all, in bank loans. On the basis of the essence of bank lending and the peculiarities of the functioning of SMEs, the interpretation of the economic essence of "bank lending to small and medium business" was improved by focusing on the fact that in the process of moving the loan value between the bank and small business, not only financial, but also economic a relationship requiring the use of special methods of lending (counseling, guaranteeing, doing business, etc.). Such understanding of bank lending to SMEs will increase the scope of relationship between them and the bank and determine the need for development of special methods of lending, the application of which will improve the assessment of the borrower's creditworthiness and minimize the risks of the bank.
Analysis of the peculiarities of the functioning of small and medium-sized businesses at different stages of the life cycle revealed an appropriate change in the risks and needs of credit funds. This was used to improve the classification of SME lending methods, approaches to assessing creditworthiness and define the characteristics of a credit product at individual stages of the company's life cycle. This approach allows us to form a list of standard bank loans for SMEs, to reduce the risks of its lending and to increase the interest of banks in the development of this area of lending.
Analysis of SME lending by domestic banks reveal that, in recent years, loans are mainly directed only to current business activities (to replenish working capital), which determines the domination of short-term loans, in particular overdraft. In order to simplify the organization and reduce the risks of its provision, it is proposed to foresee the possibility of signing an agreement on overdraft when entering into an agreement on opening a bank account based on the results of an audit of the company's financial statements for the presence of ,,Stop-Factors”, supplementing the model for calculating the overdraft limit by a probabilistic model of default of the borrower, to the turnover of the accounts of enterprises in different currencies, consider the possibility not to exclude from circulation cashless funds. The amount of the current account of the borrower, which exceeds 20 % of the total amount of funds received from one counterparty, shall be included in the calculation of the overdraft limit for the receipt of funds from the sale of bank bills.
According to the results of research of the domestic banks practice and the methodology of the NBU for assessing the credit risks for large and small enterprises, the peculiarities of the process of assessing the creditworthiness of the borrowers – SME entities by domestic banks were identified, namely: heterogeneity of information; not always adequate reflection of risks in the values of financial ratios, underdeveloped methodology for assessing the creditworthiness of SMEs in the early stages of their activities. It is revealed that the key limitation of the application of certain methods of credit assessment is the availability of information about the borrower, the level of qualification of bank employees and the time spent on the decision. To improve the quality of credit risk assessment, it was proposed to develop methods for assessing the creditworthiness of borrowers – SME entities on the basis of a professional judgment of the bank, which lies in the plane of taking into account qualitative factors, taking into account non-formalized indicators of questionnaire type, managerial information. It is proposed to improve credit scoring by introducing an emergency monitoring procedure for crisis situations in accordance with the life cycle of the borrower. The expediency of using cognitive analysis is substantiated, which will allow to estimate adequately quantitative and qualitative indicators of activity of the SME on the basis of drawing up of a cognitive map, showing both risk factors, and causal-consequential dependencies between them. This will generate a scorecard of bad borrowers.
