Connect with us

Business

BRINGING SME FINANCE INTO THE 21ST CENTURY

BRINGING SME FINANCE INTO THE 21ST CENTURY

Ollie Maitland, Product Director and Co-founder of Capitalise.com

 The traditional SME financing model is broken.

 While banks are repeatedly reaffirming their commitment to funding for SMEs, with HSBC just last month setting up a £10bn ‘loan chest’ for small businesses, it remains very difficult for small and medium sized businesses to secure finance.

 According to recent research from the British Business Bank (BBB), banks still account for over 80 percent of SME lending, with 78 percent of this coming from the high street big four. Alternative lending – such as peer-to-peer – accounted for £1.26bn of SME financing in 2015. This is dwarfed by an estimated £163bn of bank loans and overdrafts in November of the same year.

 SMEs less than five years old face a reported 50 percent rejection rate from banks.

 In a business environment plagued by Brexit uncertainty and regulation shakeups, the SME economy can ill afford to be dealing with funding challenges.

 We must bridge the financing gap.

 Through dealing with SME owners and their accountantseveryday, it is clear that there is a knowledge gap that is causing this disconnect. While banks can provide an excellent source of funding, they are simply one of many options, and are not the right option for every business. The challenge is that, with 78 percent of the market, banks represent the comfortable option.

 Through setting up Capitalise.com, my eyes have been opened to the frankly overwhelming range of tailored financing options. 71 percent of SMEs still only apply to just one lender, usually their bank. Looking further afield is complex and opaque. While financial marketplaces and comparison sites are making great strides in the area, it’s a new phenomenon and knowledge amongst SMEs is currently limited.

 Other areas of finance, such as cloud accounting, are already revolutionising SME business processing. Xero, the accounting software pioneers, are a prime example of tech that is making small businesses more efficient. The firm now boasts almost three quarters of a million subscribers in the UK alone.

 This revolution in accounting is what is required in SME financing. The likes of Xero have successfully bridged the knowledge gap to make an alternative approach common sense for SMEs. It is through talking about these solutions that we increase awareness, but this is half the battle.

 To make a real difference to UK businesses, we must improve access to these alternative SME finance sources. Consumer finance has enjoyed a plethora of marketplaces that encourage choice for a long time. Now we are seeing the same transparency coming to small business finance too.

 With only 3 percent of UK start-ups becoming midsized, in comparison to double that in the US, it’s time we picked up the pace. The catalyst to this business growth?A financing revolution through improved access and choice.

Business

Return to work: Flexibility, preparation and communication are key

Return to work: Flexibility, preparation and communication are key 1

By Matt Weston, Managing Director, Robert Half UK

As lockdown restrictions ease for the foreseeable future, conversations across the business world are starting to turn to how employers can safely and seamlessly prepare for their workforce to return to the office.

Research from Robert Half has found that over half (54%) of employees are worried about working in close proximity to their colleagues, while a similar proportion are eager to return to the office due to loneliness working from home (45%) or concerns about missing out on career opportunities (30%).

Unsurprisingly, after everything companies and their employees have done to successfully adapt their operations and working practices to social distancing rules over the last few months, immediately returning to the old ways of working will likely neither be sensible or practical. With safety being the key priority for the ‘new normal’ of office life – communication, flexibility and preparation should be the main focus areas for employers.

With this in mind, what are the challenges and opportunities that employees anticipate as they prepare for the return to work, beyond government and industry supplied health and safety best practice? Furthermore, how can employers best support their staff during this period?

Keep people at the heart of change

It is important to recognise that your workforce has been working through an intense period of uncertainty and change for months, which can be incredibly unsettling. On top of this, working for weeks in isolation without the usual physical interactions with team members could be potentially detrimental to employee engagement and mental wellbeing.

Having adjusted to keep staff connected with one another from a distance with virtual team building exercises, video calls and daily check-ins, as teams begin working in hybrid models with some in the office and others remote, staff engagement will need to adapt again.

Managing people with greater sensitivity and maintaining positivity throughout will be crucial. To help instil a sense of normality and engagement, encourage maximum collaboration between individuals (in accordance with social distancing rules), and make sure teams feel part of company goals and opportunities through regular meetings and communication – no matter their location.

Continuing to invest in technology and offering flexibility will also be important to ensuring that people can continue to work remotely or on-site, either in accordance with their own wishes or as part of your staggered return-to-office plan.

Communicate, communicate, communicate (and listen)

Reassuring staff that they are able to safely return to the office will require continuous communication. From expectations of the physical office, to expectations of how to operate within hybrid teams, these new expectations and new workplace requirements should be communicated to all staff clearly to avoid confusion.

Regular email updates, updates on the company’s intranet and social media channels, as well as frequent town hall meetings (either online or in a smaller setting) could be key elements of an effective communications approach.

Also, consider a feedback channel to allow staff within the team to offer thoughts on their experience of returning to the office and any suggestions on improving the process. Whether on a company-wide basis or a team-by-team approach, schedule regular check-ins to engage with employees’ questions and concerns.

Maintaining open communication channels with your team will be essential for keeping up employee morale and ensuring clarity. For example, if some employees aren’t comfortable with coming to the office every day, then they should have plenty of opportunities to voice their concerns and have them dealt with promptly, respectfully and fairly.

Staggered return-to-office planning

Depending on the size of business and density of office space, maintaining home working arrangements across teams on an alternating basis could make it easier to implement safe social distancing. This involves select teams working remotely while others work on-site on any given day.

An alternating approach to remote working might also reduce the risk of staff feeling pressured or overwhelmed by an immediate return to the office five-days-a-week. After all, some families might be juggling temporary disruptions to childcare arrangements and public transport systems will likely become crowded again. So, a transitionary period will help everyone adjust to post-lockdown office working.

Finally, if you have developed your technology infrastructure to facilitate remote working, you would do well to continue to leverage these new capabilities as in all probability, a mixture of remote and at-office work will be needed for some time.

Continue Reading

Business

Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy  

Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy   2

Leading payments provider, Contis, has applied for two grants from the RBS & BCR Alternative Remedies Package, totalling £35 million.  

Unlike most applicants who will deploy funds through a single brand, Contis is taking a completely different approach. The funding will be used to drive fintech innovation in the UK by developing an off the shelf, B2B electronic and card payment technology platform for SMEs. With Contis’ powerful tech stack and regulated status, this will empower hundreds of fintechs to support the SME market with groundbreaking technologies, payments and lending capabilities. Contis today services over 800,000 consumer accounts, 14,500 business accounts and processes £4bn in transactions per year, demonstrating a proven track record.   

UK businesses are facing a challenging economic environment with the impacts of Covid-19 and Brexit. As large corporations and entire sectors are affected, SMEs will play a vital role in the recovery. Contis’ approach is completely disruptive, offering three channels to maximise support for SMEs and sole traders, through three unique brands, all powered by APIs from Contis’ modular and configurable engine. 

1.       Canvas for Business 

Contis is a super-vendor in the world of fintech, offering payments through proven banking rails and card scheme capabilities including issuing pre-paid, debit and virtual cards. They’re linked to digital delivery like Apple Pay and Google Pay, and a trusted tech stack that boasts 99.99% uptime.  

With funding from the Capability and Innovation Fund (CIF), Contis’ technology and regulated services will be made available to the whole fintech community, enabling them to provide dedicated SME accounts with the latest leading-edge capabilities delivered via Contis’ wholly owned, secure, cloud-based technology and apps. Contis’ solution has a firm eye on the need for SMEs to compete internationally, particularly after Brexit, and offers FX integration as standard.  

Canvas for Business will increase competition by providing fintechs serving the SME market with technology that outstrips the big banks. Contis will also provide credit referencing capabilities and empower fintechs to lend to their SME client base through Contis’ own credit licence. Without the constraints of legacy systems, it will enable simple connectivity to accounting and payments solutions, as well as to unlimited future innovations.  

2.       Engage for Business 

Over 150 Credit Unions currently use Contis’ Engage service and technology, and hold an estimated £400 million in undeployed cash reserves. Developed with CIF funding, Engage for Business will enable Credit Unions to launch business accounts and payments products for the first time, and allow excess funds to be redeployed in the SME sector through business support loans. This will revolutionise access to funding for sole traders and small businesses. 

3.       Freedom for Business 

With CIF funding, Contis will also offer large scale SMEs a direct-to-market solution where Contis holds the relationship and provides a bespoke offer to meet the business’ exact needs. 

Contis’ application to the Capability and Innovation Fund is focused on creating the widest possible impact for UK SMEs by fulfilling their accounts & payments needs and driving innovation in SME financial services. 

Through the grant, Contis will empower over 200 fintechs and Credit Unions to provide credit, simplify payments integration into everyday business needs, offer digital credit referencing, provide budgeting tools to SMEs, enable automated payments, give predictive insight on cash flow, provide rewards to SMEs on spending, and much more. 

Peter Cox, Founder and Executive Chairman of Contis said: “Our mission is to democratise payments and financial services for all SMEs, so they’re spoilt for choice with innovative and affordable solutions that meet their exact needs. Our approach, based upon proven technologies, will broaden and disrupt the services available to SMEs far beyond the capabilities of existing providers such as the big banks.  

“By driving competition and innovation, while improving the availability of funding, our approach will increase the services on offer to SMEs and make them more affordable, therefore becoming easier for every entrepreneurial person with vision to run their own businesses.” 

Continue Reading

Business

Four years of digital transformation in four weeks: UK lockdown puts pressure on brands to digitally deliver

Four years of digital transformation in four weeks: UK lockdown puts pressure on brands to digitally deliver 3

Nearly a third (32%) of consumers would switch providers if a brand’s website is unavailable for more than 24 hours

A study released today reveals the scale of omni-channel pressure brands now faced as a result of the Covid-19 pandemic, as consumers flock to apps and websites to as the priority destination to transact with brands.

The UK has experienced a huge leap in use of online services thanks to lockdown, with the public appearing to have less concern for the availability of a brand’s physical location. Research by Sungard Availability Services (Sungard AS) uncovers a “window of availability” that UK businesses now have before consumer loyalty changes:

  • If a brand’s website is down for 24 hours – 32 percent of consumers would switch provider
  • If a brand’s app is down for 24 hours – 28 percent of consumers would switch provider
  • If a physical store is closed for 24 hours – 20 percent of consumers would switch provider

The results by industry paint an interesting picture of the availability timeframes brands are expected to adhere to:

  • For online retailers, excluding grocery retailers – 23 percent of consumers would switch provider if they could not access online services for 12 hours, rising to over a third (34 percent) after 24 hours
  • For financial services and entertainment streaming platforms – 21 percent of consumers would switch provider after 12 hours, rising to 33 percent after 24 hours
  • In the case of online grocery shopping – 20 percent would switch provider after 12 hours, rising to one third 33 percent after 24 hours

The findings also highlight that as digital reliance increases, so will consumer expectations towards availability in the future. Over the coming two years, a third (33 percent) of consumers expect online financial services to always be available, rising to 35 percent for streaming services.

“UK consumers have become reliant on the constant availability of online services, and lockdown has only served to heighten this,” comments Chris Huggett, SVP, EMEA at Sungard AS. “What used to be a choice between physical and digital has now firmly accelerated into digital environments across various industries. As online worlds continue to outpace bricks and mortar as the face of businesses, ensuring constant availability and clear communications on downtime will be key for brands to build trust and loyalty.

Continue Reading

Call For Entries

Global Banking and Finance Review Awards Nominations 2020
2020 Global Banking & Finance Awards now open. Click Here

Latest Articles

Return to work: Flexibility, preparation and communication are key 4 Return to work: Flexibility, preparation and communication are key 5
Business2 days ago

Return to work: Flexibility, preparation and communication are key

By Matt Weston, Managing Director, Robert Half UK As lockdown restrictions ease for the foreseeable future, conversations across the business...

How sustainable AI improves the triple bottom line 6 How sustainable AI improves the triple bottom line 7
Technology3 days ago

How sustainable AI improves the triple bottom line

An investment in green AI enables financial services firms to align people, profit, and planet By Nick Dale, EVP business...

The impact and implications of Covid-19 on financial reporting 8 The impact and implications of Covid-19 on financial reporting 9
Finance3 days ago

The impact and implications of Covid-19 on financial reporting

By Mark Billington, Regional Director, Greater China & South-East Asia, ICAEW The economic consequences of Covid-19 have been unprecedented, affecting...

Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy   10 Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy   11
Business3 days ago

Contis enters RBS Capability and Innovation Fund bid seeking £35 million for disruptive SME growth strategy  

Leading payments provider, Contis, has applied for two grants from the RBS & BCR Alternative Remedies Package, totalling £35 million.   Unlike most applicants who...

Four years of digital transformation in four weeks: UK lockdown puts pressure on brands to digitally deliver 12 Four years of digital transformation in four weeks: UK lockdown puts pressure on brands to digitally deliver 13
Business3 days ago

Four years of digital transformation in four weeks: UK lockdown puts pressure on brands to digitally deliver

Nearly a third (32%) of consumers would switch providers if a brand’s website is unavailable for more than 24 hours...

Demonstrating the value of collaborative leadership during crises 14 Demonstrating the value of collaborative leadership during crises 15
Business4 days ago

Demonstrating the value of collaborative leadership during crises

By Jean Stephens, CEO, RSM International In 2000, a leading expert in behavioural science, Daniel Goleman, outlined the six key...

Empowerment Accelerates Continuous Improvement 16 Empowerment Accelerates Continuous Improvement 17
Business4 days ago

Empowerment Accelerates Continuous Improvement

By Larry Sternberg, JD, Fellow, Talent Plus, Inc. Empowerment First, let me clarify how I am using the word “empowerment”...

What is loneliness and how can you manage it? 18 What is loneliness and how can you manage it? 19
Top Stories4 days ago

What is loneliness and how can you manage it?

By Iris Schaden Your Business and Personal Coach A mere century ago, almost no one lived alone. Today, many do...

How banks can build digital transformation into business continuity 20 How banks can build digital transformation into business continuity 21
Business4 days ago

How banks can build digital transformation into business continuity

By Andrew Warren, Head of Banking & Financial Services, UK&I, Cognizant Businesses around the world are falling victim to the...

Akerton Partners 22 Akerton Partners 23
Finance4 days ago

Akerton Partners

Akerton Partners S.L. is a Spanish independent mid-market corporate finance advisor founded over a decade ago, in 2008, amid a...