Category: Financing, Banking, Inclusion & SMBs
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Here’s to another interesting year
I say this a lot. Time flies! Here we are and another year whizzed by! 12+ months ago I took our start-up in a different direction, turning off functionality, changing the business model and rearranging the product set. Months were spent diving deep into unravelling the reason for so many curious but unengaged users.…
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The Low-Down on SMB Lending
Earlier this month, the Federal Reserve Bank of Cleveland released research suggesting that SMB lending had more than one thing affecting it. A supply and demand problem. Policy Analyst Anne Marie Wiersh and Professor Scott Shane summed it up in the following paragraph: “Since the Great Recession, bank lending to small businesses has fallen significantly,…
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When You Should Order Invoice Finance on the Funding Menu–Part 2
In part 1 of this two-part post, I talked about the use of invoice finance as a cost effective way for business to fund its credit sales. While invoice finance tends to have ‘sweet spot’ sectors (manufacturing, services) and hard to do areas (construction, hospitality, consulting), the basic suitability is simple: we’ve seen deals go…
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When You Should Order Invoice Finance on the Funding Menu–Part 1
Money comes at a price. The more willing your lender is to take risks, the higher the return expected. That translates to your borrowing costs and what you have to bring to the table. Practically speaking, if your business does not have the trading history or serious collateral needed by a lender, invoices and orders…
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Why e-Invoicing Helps Late Payment to Smaller Suppliers More Than Regulation
This week, the European Directive 2011/7/EU on Combating Late Payment in Commercial Transactions comes into force. To summarise, it’s looking to cap payment terms at 60 days unless agreed otherwise, ‘provided such extension is not grossly unfair’ to the supplier. It also sets a maximum period of acceptance/verification to 30 days unless agreed otherwise and…
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Connecting To Cash: Keys To Unlock Working Capital
Life as an entrepreneur trying to reshape commercial lending is far from boring. Trying to understand what will make commercial lenders finance a business. Figuring out why a business waits until they have a critical cash need before acting. Or for that matter, what about their previous lending experience discouraged the businesses from talking to…
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Turning e-Invoicing Into A Key To Liquidity
Policy makers recognise that any means to inject liquidity into the Small and Mid-Size Business (SMB) sector needs to be pursued. The BIS task force in the UK identified Supply Chain Finance (SCF) or Reverse Factoring as one of the ways to increase cash flow availability to SMB supplier base. Unfortunately, credit capacity is a…
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Revenues Fund Working Capital, Not Equity!
Short term needs are better financed by short term capital. Equity is better spent on building a business, not bridging cash flow. Craig, the founder of a Bay Area mobile media start-up neatly summarises something we observe across many early stage tech businesses. ‘”We approached x bank (a well known bank in the community) to…