Lagging behind on your business’ finances is not necessarily the result of negligent planning or the lack thereof. Being strapped for cash is a recurring problem for Small to Medium Enterprises (SMEs). This can be brought upon by delays in customer payments (accounts receivables), or by an unexpected order. When this happens, SME owners would usually apply for a bank loan or rely on other sources of financing to fill in the cash flow gap as counting on their clients to pay early would be a highly unlikely occurrence. For some businesses, they get purchase orders so large, they need that cash in a matter of one to two days.
There may still be a stigma when it comes to borrowing money, and some SME owners may still prefer to keep this a secret, but without the help of business financing, growth can be hindered. It’s best we bust the myth as 2019 comes to a close with a few success stories of SMEs who have grown in scale by applying for financing this year.
Going from traditional financing sources to Fintech
The story of one businessman who had built a corporation on his own and developed his business over the decades is the perfect example of how business owners have come to enjoy the benefits of Fintech. Most of his operating budget had already been used to fund ongoing projects and through the trust and confidence of one of his government clients, he had been commissioned a new project. The problem was that it was a sudden purchase order and had to be supplied soon.
He, of course, had to explain the cash flow gap to his client and had only a few days to solve this business challenge. Luckily, he was able to chance upon online business financing through First Circle and was able to take on a loan that allowed him to take on a huge project for his company. Through his quick compliance and submission of all his trade documents (in the form of a purchase order), without the need for collateral, he was impressed by the quick disbursement of his loan.
Another client of ours experienced the same thing. He had previously been averse to getting financing from any other firm other than banks, but he was left with two choices when he suddenly got a surge of orders: get fast financing now or forego the extra funds. Since financing with First Circle, he has since been a regular customer for his multi-million business in the service industry.
Business financing for startups
Startups are a dime a dozen these days and the survival statistics can be daunting for these SMEs, especially when they think they haven’t been in the business long enough to get financial support. One of our clients has actually grown parallel to us throughout our more than 2-year relationship. As her projects offers progressed, so did her need for more financing and she has considered First Circle to be her business partner who provides her needs: fast, convenient and smart financing. She also doesn’t see the partnership ending with her plans to expand her business over the next few years.
First Circle is supportive of startups in the Philippines, as the company is also a brainchild of visionary entrepreneurs who saw a potential in the local economy that runs on sweat, blood and dreams of Micro, Small, and Medium Enterprises (MSMEs). They saw the obvious need for business financing by MSMEs who had no collateral to provide to banks in exchange for the financing they need. They instead have to resort to family and friends, but these are not steady streams of financing. Then, when they are pushed to the wall, they are left with no other choice but to depend on loan sharks whose interest rates cost an arm and a leg.
Fast, fair, and flexible financing ─ it’s the service the firm provides that business owners have come to appreciate about First Circle. Not everyone will have a property in their name that they can provide as collateral, but well-established business will definitely have an invoice they issue to clients or a purchase order given by their customers. This is where our strength came in handy for our new and loyal business partners.
First Circle offers business-to-business short-term loans through two products. One is through Invoice Financing, which would be relevant to your business when you need to access cash you are owed by your clients at the moment. Another would be Purchase Order Financing, which temporarily funds your clients’ increased orders for the season. We simply verify the fidelity of either document provided by customers applying for business financing. Once verified, loans are disbursed within three to five business days.
Access to financing to support the growth of Filipino MSMEs really shouldn’t be that hard. Through business financing, more business owners can stay on top of their business’ growth and reach their full potential.