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SME Finance Means Missed Opportunities And Lost Sleep


Let’s take an updated look at SME finance. Across the world, small business finance is about more than how much money is on the books. As demonstrated by the latest research in the area, SME finance patterns include ways small businesses are obtaining working capital, how they are investing in their companies, their outlooks on business growth and even whether these entrepreneurs are losing sleep over finances (they are). We break down the latest data on small business money below.

$27.5 billion in asset-based finance went to U.K. companies last year, a 13 percent increase in this category of finance from the year prior. The Asset Based Finance Association (ABFA), which released the data, said that businesses are increasingly turning to this tool to supplement traditional finance and to support business growth. Large companies have increased their use of asset-based finance the most, researchers found, largely to finance M&A activity. But overall instability resulting from the Brexit vote, the report noted, led to a 7 percent increase in asset-based financing in the fourth quarter of 2016 alone. Businesses are in need to a cash cushion, the ABFA said, adding that 80 percent of all asset-based financing is made up of invoice financing.

$96,279 is lost in missed opportunities by U.K. SMEs every year because of lack of financing, according to a report from Aldermore. Its Future Attitudes report, released last week, found that more than 1 million SMEs in the U.K. are unable to take advantage of a new business opportunity because they lack access to financing, and that missed opportunity is worth a lot. Still, significant portions of SMEs are attempting to access finance, with 18 percent saying  they went to a bank to finance their business and 14 percent reporting that they went to an alternative lender.

90 percent of U.K. SME owners lose sleep over money issues, found KPMG Small Business Accounting in a new report. The majority also said that finances are a regular concern for them, with nearly a third reporting that they lose sleep “very frequently” because of this worry. The data, KPMG said, not only reveals how worried small business owners are over their finances, but also points to compounding issues, with a lack of sleep often leading to reduced productivity and positivity in the workplace.

71 percent of U.S. SMEs say their financial situation is a good one, an increase from levels last November, according to researchers at Wells Fargo. Its Small Business Index, developed in conjunction with Gallup, found that SME optimism has returned to levels not seen since before the recession, and small businesses are feeling pretty good about where they stand. Nearly half (45 percent) of SMEs said their business’ revenue increase over the past 12 months, while 64 percent said cash flow was at least somewhat good over the last year – both statistics had increased since November levels. Another increase was revealed in SMEs’ access to finance, with 40 percent reporting that credit was at least somewhat easy to obtain, up from 34 percent in November.

6 percent of a South African SME owner’s day is spent chasing late invoice payments, found Xero in a new report. That means small business owners in South Africa have an easier time collecting payment than they do in the U.K., where a small business owner spends 10 percent of their day doing the same. In South Africa, the average invoice is paid 10 days late, compared to 14 days paid late in the U.K. Still, neither situation is a good one. In South Africa, found Xero, nearly a third of SMEs say late payments are the cause of their cash flow problems, and 18 percent said it contributes to reduced morale.


New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.

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