Supporting SMBs during Lockdown – how Fintechs will provide a lifeline in 2021 and beyond

SME support during lockdown

While the UK is still ranked in the top ten most competitive economies by the World Economic Forum, this is far from assured after Brexit. If the response in the past few months to Covid-19 is anything to go by it is our small business entrepreneurs who will have the agility and ability to respond to the demands and the opportunities of a post-Covid world.

Change is an accepted constant in the business landscape but can be particularly challenging for small businesses who operate in a competitive marketplace and have less cash reserves and resources to draw on to help them through turbulent times. The health of these small businesses will be critical to the country’s future.

Fintech is not the holy grail for small businesses: but it does provide tools and means to buffer the effects that are likely to be seen in unpredictable and volatile markets. This article looks at the ways in which Fintech can address, prepare and manage three key challenges in the current market conditions: cashflow, supply chain and payments.

Tools to Strengthen Cash Flow Management 

Despite growing media and government focus, late payments continue to be a critically important issue for small and medium-sized enterprises. If a business is looking to extend their product reach or to import from further afield these can be exacerbated with increased shipping times and different payment practices as standard in other countries.

Fintech in this area has been motoring ahead, with Open Banking and Open Accounting more common place and almost relied on by funders. Consequently, 2020 has also seen a rise in adoption and partnerships by the main accounting software platforms with companies such as Float and Futrli which leverage AI-powered cash flow prediction and planning software. Whilst the forecasts are automatically updated with actuals, SMBs can also carry out hypothetical scenarios to predict future working capital gaps and identify when they may need additional funding support.

Minimising the impact of Supply Chain Disruption  

It is always difficult to plan for the unknown, all new relationships start with negotiation and an element of trust. Throw Covid and Brexit into the mix and SMBs have been looking at contingency planning for what seems a lifetime. Reviewing potential impact on their supply chains, customer bases, and business relationships. Fintechs and auxiliary companies can help speed up this process by means of credit checking, insurance and selective finance.

Nimbla and Tradelock provide selective PAYG insurance and the insights needed to assess real–time buyer risk and safeguard against non-payment through insolvency. SMBs can now insure receivables in a matter of minutes.

Selective receivables finance providers, such as Accelerated Payments leverage the increasing availability of open source data and real-time credit information to ensure that they can give the same level of service and decisioning time to SMBs whether they are trading domestically or overseas.

Easing the Headache of Payments Management

In a market as dynamic and unpredictable as foreign exchange, it adds a layer of complexity to trading abroad.

FX companies, such as Clear Treasury can apply their technical knowledge and fundamental analysis to help SMBs define the best approach to control risk exposure. Others, such as Fire can offer digital accounts to manage and automate payments in multiple currencies including debit cards. These can be opened online or via mobile app enabling bank transfers to/from anywhere in the world.

Obviously, all of this has been supported by the perpetual growth and availability of data and open sharing between Fintech of real-time information on SMBs. Many of these Fintech options sit within the same ecosystem or marketplace, which means an SMB does not even have to sign up – the products are available with one central login. Fintech continues to act as an enabler.

It is hard to predict what a post-Covid and post-Brexit world will look like. Until that world arrives Fintech will provide a level of support needed for SMBs who otherwise will not be around to help us recover.


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