The challenges facing small businesses are legion, ranging from productivity issues to funding to receiving payments on time. However the advent of technology has helped to level the playing fields relative to larger well established businesses. Fintech companies have stepped into the breach and are disrupting business and financial processes and making these accessible, often at a fraction of traditional costs and at increased productivity.
Fintech companies are disrupting the small business space in several ways:
1. Cloud based financial management
There are a myriad of online accounting solutions that allows small business to manage their finance, plug into their existing online banking offerings and maintain reporting standards. Some solutions give real time financial statements and cash flow trends that allow efficient collections and cash flow management.
Digital crowdfunding has become an alternative for small businesses and start-ups. The crowdfunding market globally is estimated to be over $30bn. The pool of potential investors has considerably widened and allows smaller amounts depending on their risk appetites. In some cases, funding is theme based where investors have higher risk tolerances for companies in particular sectors or serving specific segments.
3. Alternative credit models
Traditional bank scoring models rely on historical financial statements over several years. Newer models can analyse transactions in real time and algorithmically assess loan facilities and rates based on financial performance over much shorter periods, and do so in real time.
4. New marketing models
Sales is the lifeblood of small businesses yet marketing costs can eat into precious cashflow. Fintech companies have unearthed tech-based marketing platforms at lower cost and wider reach than traditional marketing models
5. Financial analytics
Analysis of financial statements, and indeed, of other data has been usually inaccessible to small businesses. However, there are now financial analytics solutions available to any size of business, generally available online or as an app.
Matchi currently showcases hundreds of market-ready fintech solutions across all of the above trends.