When it comes to managing finances for a successful business, gaining financing is only one part of the story for small and medium-sized enterprises (SMEs). Thankfully, various FinTech platforms provide solutions that can make the lives of small business owners easier. Mainly, FinTech helps through the three categories below:
Online financing platforms
To develop and expand their businesses, SMEs need funding and working capital. In the past, most SMEs would apply for business financing from financial institutions. Certain drawbacks include strict requirements, usually for collateral, that need to be fulfilled or a long, drawn-out process. Some smaller SMEs might not even have financial documents with the level of detail required by banks.
Various FinTech models have risen up to fill the void, mainly through online-based financing and peer-to-peer (P2P) financing. The process of applying for business financing via FinTech tends to be online-based, easier, and faster. Some platforms now have apps that allow prospective SMEs to apply for financing anytime, anywhere. Many online financing and P2P financing platforms also require no collateral from SME applicants.
Certain micro and small businesses have no accounting systems as their owners feel it is not a priority. And yet accounting is crucial to any enterprise. Recording your income and expenses will help identify financial problems in cash flow before the issues grow unmanageable. Moreover, well-managed financial statements will help your chances in gaining business financing approval.
Many SMEs, of course, don’t have enough resources to hire an accountant. As a solution, financial technology has brought online-based accounting to the next level. SMEs can use various software and platforms to manage their cash flow record. In addition, some platforms can help the invoicing process and inventory listing. The data in online-based accounting platforms can also be accessed whenever, wherever you want.
Electronic and digital payments
It’s no surprise that when it comes to online transactions, customers prefer the simplest and quickest payment method. Financial technology has raced to provide solutions for online transactions by offering electronic or digital payment systems. Research well and choose one easiest for you to use. If your SME deals with international transactions, look for FinTech platforms that offer a multination and multicurrency payment option.
The rise of FinTech can impact how SMEs grow and develop. There are many options out there for SMEs to choose from and utilize!
Interested in business financing provided by online and P2P platforms? Click here.