The Dollars And Cents Of SME Finance

The message is clear: Automated, digital FinTech solutions can help businesses and financial service providers save money. But it may be more effective to actually show how much money can be saved. The latest research puts a price tag on the finances of better procurement, banking, cash management and innovation among small and medium-sized businesses.

$139 billion could be saved by U.K. SMEs through smarter procurement, claims Tungsten Network. The eInvoicing company published new research that found U.K. small and medium-sized enterprises are losing out on massive savings — up to 6 percent of their combined annual turnover — by passing up more efficient procurement solutions. Mainly, that means shopping around for better deals when procuring goods, Tungsten said. In a statement, Tungsten CEO Richard Hurwitz said that, if SMEs realized even a portion of this savings potential, “profitability would soar, and working capital, as well as cash flow, would be significantly improved, allowing businesses to be more agile and flexible.” The company identified supplier reviews and relationship management as key to better procurement strategies, too.

$5.3 billion wasted in Australia due to SME banking “red tape,” says payments company Tyro. That lost money is a result of the time used by small businesses to cut through that red tape to check, enter and reconcile banking data as they do their own bookkeeping. Tyro pointed to banks’ inadequate services to Australian SMEs and small businesses’ dissatisfaction with their banking service provider as two areas that need to be addressed. Small businesses spend an average of 20 days a year dealing with banking issues, while 35 percent of SMEs surveyed said they agreed their banks could be doing a better job at serving them. Meanwhile, half of SMEs surveyed said they do their own bookkeeping, and 20 percent said they don’t use any kind of accounting software.

$290 million in venture capital landed at blockchain startups in H1, revealed Juniper Research. More than 30 startups in the blockchain and bitcoin space landed funding deals from venture capitalists, but more than a third went to just three companies: Circle, Blockstream and Digital Asset Holdings. While VCs are jumping to blockchain innovators, traditional financial institutions, Juniper Research said, are also flocking to the space. Analysts point to the wide array of potential use cases for blockchain technology as a major factor behind its popularity with investors, from smart contracts to cross-border payments.

$144 million in SME loans originated through Bizfi in Q2, the company announced last week. The milestone represents a 25 percent year-over-year increase for the quarter, with funds landing at more than 3,580 companies using the Bizfi platform, it said. The marketplace lender revealed the statistics were boosted by a recent partnership with the Western Independent Bankers trade association, as well as the National Directory of Registered Tax Return Preparers & Professionals, which Bizfi Founder Stephen Sheinbaum said can help small businesses access funding that they might not otherwise know was available.

$380,000 was stolen from companies in West Australia through supplier scams, according to the Department of Consumer Protection. There are two key scams targeting SMEs in West Australia, regulators said. The first involves cyberthieves hacking into the email of a top company executive and requesting a money transfer through that email address; the second involves scammers posing as a supplier and submitting fake invoices to companies’ accounts payable departments. Officials describe the scams as “sophisticated,” with hundreds of thousands of dollars having been stolen from businesses in just the last year. Analysts have found 15 cases of these crimes hitting companies in the area.

7 months of SME lending declines hit Canadian market, found PayNet last week. From December to June of this year, small business lending levels have dropped. Researchers said a decline in small and medium-sized business lending is likely to lead to sluggish economic growth overall. In a statement, PayNet President Bill Phelan said SMEs in Canada simply aren’t seeing high demand for their products and services, so they’re unwilling to invest in production capacity. At the same time, however, SMEs in the nation lowered their loan repayment delinquency rates (though the instance of SMEs more than 90 days past due on their loan repayments inched up slightly in June).