SME finance in the recovery from Covid-19

When Clear Factor was set up, the founders had a simple vision for the business. They saw a world where every viable SME business would have access to fairly priced working capital in the form of invoice finance delivered through a democratised and decentralised ecosystem.

With the devastating effects of the Covid-19 Coronavirus pandemic ravaging global economies, this vision becomes a necessity for millions of businesses worldwide.

SMEs need access to cash. Now.

Governments globally have recognised this need. Across the piece, a range of support schemes are being put in place. These have been dynamic, bold and creative, with many approaches ranging from tax deferral, supporting staff salaries, structural policies and access to subsidised loans.

The intentions have been good.

But in practice, many of these initiatives are taking time to implement. Some are having unintended consequences.

Take government backed loans for example. Typically, these will provide a state guarantee for 80% of an advance. The idea is that these loans would be quick and easy to access.

But traditional banks with traditional attitudes are creating institutional barriers. They are saying that they need business plans to test the viability of the loan. They need collateral for the residual 20%. They want security over property, director’s guarantees…and still want to charge very high interest rates.

Traditional funders’ mechanisms for SMEs are showing themselves to be slow, complex, heavy and expensive.

This isn’t the way. The last thing that an SME needs just now is a bureaucratic process, and unaffordable product and owners to be asked for their last personal assets for security.

Looking forward, especially when the lockdowns eventually start to be released, businesses will need support. Quickly, reliably, easily, flexibly… and at low cost.

And this is exactly where Clear Factor’s model of invoice finance comes into play.

SMEs that sell on credit hold the most immediate real-world secure asset available –: their sales invoices. These represent the cash that the SME will receive when their customers settle the bill.

Clear Factor’s secure platform gives an SME immediate access to a range of funders who will bid to buy its invoices, giving it easy and immediate up-front access to the cash tied up in its credit sales.

The blockchain technology underpinning the platform makes the process simple to use, reliable and safe for all the parties.

There are no complicated contracts, no tie-ins, and no hidden extras.

The approach is flexible; the SME can sell one invoice or a hundred. It can do it daily, weekly or whenever.

All this means it is low cost too.

Here at Clear Factor, we are standing by to play our role in financing SMEs as they battle to overcome the challenges created by the global pandemic, helping to rebuild the economy, support employment and create new wealth.

Working together we can make this happen. Come join us at Clear Factor and build the future.