In today’s uniquely fast-paced and dynamic economy, access to capital is more crucial for businesses than ever before. However, securing these necessary funds has become a consistent challenge for small and medium-sized enterprises (SMEs). In a 2022 survey conducted by the National Small Business Association, 64% of SMEs reported that access to capital was a significant barrier to optimizing their business performance, with an entire 26% of respondents stating they were unable to secure any business funding at all.
SME Capital Challenges
Inadequate access to capital can be highly detrimental to the growth and maintenance of all businesses. This is especially true for SMEs in their early days, where the opportunity cost of time is high. Lack of capital can take away a business’s ability to invest in new assets, hire necessary employees, or expand into new markets, among many other limitations. These critical restraints limit a business’s growth and competitiveness. In the most detrimental circumstances, a lack of access to capital can cause businesses to fail altogether, resulting in rippling negative impacts to the business itself and any other enterprises and customers it had benefitted.
Solutions Available to Businesses
In today’s economy, there are many solutions that exist to help businesses overcome the challenge of accessing capital. However, understanding these different products and the specific circumstances in which they should be used can pose a challenge of its own. Businesses often move forward with the capital products they’re most familiar with, when many better alternatives may exist to suit their needs. Every business should seek guidance or education to avoid detrimental commitments, aggressive APRs, or other potentially negative effects of committing to one capital product over another.
Traditional and Alternative Financial Vehicles
Lines of Credit
Revenue Based Finance
Supply Chain Finance
Government Backed Programs
A Look to the Future
Boundless helps businesses access the right capital at the right time through a proprietary matching algorithm. To better understand what products are available and which lender may be the right fit for your business, create a profile and get started today.
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