Marketlend Academy: Today’s biggest SME business challenge
Every business has its share of pain points, but SMEs have a unique set of challenges when doing business. Marketlend CEO Leo Tyndall says managing cash flows is the number one SME business challenge in today’s market, exacerbated by a lack of capital with borrowing terms that match the needs to SMEs. To learn more, watch the video or read the transcript below.
I think the biggest pain for the SMEs is truly cash flow, the inability to be able to match their cash flows and be able to turn around and cover their expenses and their operating business at the same time as receiving money from their customers or paying for goods. So if you look at a typical cycle, you’ll find that the SME turns around, provides a service and then has to wait 30, possibly 60 days to get paid. Obviously during that time it’s got to run a business. It needs to pay its bills, pay staff, these type of things. And they lack the cash flow to do so.
The other difficulty they have with that, or the reason why they have that difficulty is that there’s not as many options that they have out there for funding. So the financiers that are available in this type of space aren’t offering them a short-term type of 30, 60-day type credit facility. They’re offering them something like a P&I business loan, which doesn’t really match their cash flows. And then if you look at the bank side, you’ve got the difficulty with the banks not really looking at it unless there’s property collateral. So it’s not really structured in a way that matches what the SME needs to run its business.