admin May 19, 2021
The past 14 months have shaken the economy and the previous understanding of safety to its foundations. Existing models were suddenly called into question and basic rules were put to the test. Online shops have become a second indispensable pillar for many established retailers. The state quickly helped unbureaucratically, with unimaginably large sums of money to avoid the worst. Before the current crisis, this was considered unrealistic or only feasible in the long term. But in the crisis, new business models came to the fore and opened up many new opportunities. Who would have thought that working from home would become a new reality across the board by 2020. Digital business models are becoming more important and illustrate the advantages of digital processes. In the following blog, inspired by a study by the consulting firm Roland Berger, we would like to highlight some interesting points and give the reader some food for thought.
Small and medium-sized companies, companies with up to 250 people, make up 99% of all companies in Switzerland. They are therefore an important cornerstone of the Swiss economy. But these companies in particular were hit particularly hard by Covid19. For comparison: In Germany, 58% of SMEs suffered a decline in sales of 50% on average in April 2020 compared to the previous year. At the same time, every second company has liquidity reserves for only around two months. Thus, such a large break-in is very quickly existence-threatening without support. From our point of view, this value can also be applied to Switzerland. In both countries, it was only thanks to the rapid intervention of the state that worse could be prevented.
But this also meant that business models had to be adapted quickly. In Germany, more than 40% of all companies have adapted their sales channels, products / services or even their entire business model. The move towards online stores is particularly relevant in this respect. However, alternative financing models are also increasingly coming to the foreground in the area of financing. This basically refers to platforms (crowdlending), but also factoring and leasing. In addition, sales financing is also becoming increasingly important for manufacturers.
The following key financing models are used when it comes to ensuring liquidity:
Crowd4Cash has positioned itself as a comprehensive SME service provider with the brands Crowd4Cash, Crowd4Cash Easy (PoS credit) and CrowdPay. With us, SME’s can get everything from a single source, which is unique in this form in Switzerland.
How do alternative models differ from traditional SME loans?
The most important differences compared to crowdlending platforms, for example, are:
• Conditions: more flexible conditions
• Product range: more attractive and more homogeneous product range
• Processes: higher process speed
• Liquidity: faster availability of funds
• Transparency: greater transparency in terms of contract and credit terms
• Added value: higher level of service thanks to additional services
What is particularly important for an SME when it comes to financing?
Crowd4Cash carried out a snap poll on this topic. The participants claimed that the most important criteria are a simple process and attractive conditions. This shows that clients do not only value the conditions, but also the processes, which should be straightforward and fast. Hence, we are seeing major investments in the process of optimizing processes, in the banking sector. We view largely digital application approaches such as that of Migrosbank or Credit-Suisse (for their own customers) as promising. We are convinced that banks would profit greatly from cooperations with FinTech companies in this area, also with regards to other markets.
We at Crowd4Cash are convinced that SMEs should also focus on other financing options. For example, leasing, manufacturer installment options or even factoring are good ways to improve liquidity in the long term. This is also the reason why Crowd4Cash has developed from a classic crowdlending platform provider in the direction of a one-stop shop for SMEs. Thanks to our services an SME can obtain many services from a single source to optimize their liquidity. CrowdPay, for example, offers invoice financing with an installment payment option in online business or invoice pre-financing including taking over the invoice administration (Recourse Factoring). Crowd4Cash Easy enables its partners to offer their customers installment payments in a unique digital process without having to purchase or install software. Crowd4Cash also offers a simple online loan, which can be approved within 48 hours. With all these products you secure your liquidity.
If you are interested in one of our products, please contact us via contact form.
Source: “Future of SME Lending, role of digital platforms and opportunities for the future
