Getting funds to SMBs is the new imperative across the globe as nations look to reopen businesses and get people back to work. The pandemic has thrown accessibility of funding for SMBs into sharp relief and alternative financiers are stepping up to the plate. I talked to one such financier, Ian Duffy CEO of Accelerated Payments to get his views on the brave new world of SMB funding. <\/p>\n\n\n\n
There has been huge disruption in the financial services sector over the last few years, creating a generation of customers demanding convenience and immediate access to finance. This ease and availability of capital can be delivered during boom times but when you are moving into a recession – irrespective of the type of recession – funders will inevitably tend to become more risk averse. <\/p>\n\n\n\n
Covid-19\u00a0has\u00a0already\u00a0seen a huge contraction in the global lending markets\u00a0for SMBs.\u00a0Three patterns have evolved,\u00a0namely;- <\/p>\n\n\n\n
Couple these patterns with increased regulation and compliance requirements it makes it even more challenging and onerous to provide lending to small businesses. <\/p>\n\n\n\n
Ironically\u00a0the current pandemic is likely to drive deeper relationships between banks and alternative funders.\u00a0What the market is going to require is\u00a0alternative \u201cspecialist\u201d financing, such as that offered by\u00a0Accelerated Payments, matching\u00a0specific requirements to an SMB. The\u00a0bank\u2019s role will\u00a0be a\u00a0triage system identifying what the SMB needs and\u00a0point them in the direction\u00a0to\u00a0the right product with the right fit. There is a joint responsibility between banks and alternative funders in supporting a collaborative effort so that SMBs can access finance fast<\/a> to survive and thrive. <\/p>\n\n\n\n In building meaningful partnerships which share each partner\u2019s resources long-term, there is an opportunity to build an exciting fintech ecosystem. <\/p>\n\n\n\n The impact of Covid-19 has been very real and impacted all sides of globe. There has been some degree of consistency in how countries have dealt with the pandemic \u2013 particularly across the jurisdictions where we operate in Ireland, UK, USA and Canada. Whilst governments have done their best to react quickly to changing climate and a global economic shrinking, there has still been significant confusion about business and funding. There is a pent-up issue in terms of impairment and company failure meaning we will see a further retraction. <\/p>\n\n\n\n Ironically, many SMBs in North America\u00a0and the UK\u00a0are\u00a0cash\u00a0rich. The\u00a0problem will\u00a0show itself\u00a0in the next six to twelve months\u00a0when businesses\u00a0seek to\u00a0restart\u00a0or recover back to pre-Covid levels which will require significant amounts of capital.\u00a0This will be the greatest test to companies, fundamentally as\u00a0to whether they can continue to trade through recession. We hope to be able to help as many of these companies as\u00a0possible. <\/p>\n\n\n\n I think that Covid-19 will take at least 18 months to two years to correct itself. We are heading into uncharted territory that is hard to predict. <\/p>\n\n\n\n From a global business perspective, a vaccine is critical, but the timeframe for when we find one that can be appropriately tested, and mass produced remains to be seen. \u201cNimble and Quick\u201d is the hallmark as businesses have been thrown to embrace a culture of adaptability. Although the economy shows some sparks and splutters of a return to \u201cnormal\u201d it does pay to look at how far we have moved in a relatively short amount of time. There was a global standstill, a total shut down and never-ending delays in the first half of this year. So, regardless of the speed at which countries open again I do not see us going back on the next 12\/16 month to the strong levels of trade that we saw in January\/February of this year. <\/p>\n\n\n\n From an Accelerated Payments\u00a0business\u00a0perspective,\u00a0we are\u00a0extremely fortunate\u00a0in that our model\u00a0has held up\u00a0during the pandemic\u00a0with little or no impairment in our book. This puts us in\u00a0a strong\u00a0position to be able to support SMBs over the coming months.\u00a0Throughout the crisis we have kept the product the same\u00a0doing what we do best, individual receivables finance. And we will continue doing so regardless of what is thrown at us in the future. <\/p>\n\n\n\n From an employee perspective I think there has been a paradigm shift. What might have evolved over five to eight years regarding remote working and work practises has transitioned in a reasonably short time (three months). For Accelerated Payments I think the best model will be a hybrid model which would see some employees coming into the office some of the time. There will be extreme cases where individuals will not come into the office at all and others who will choose to be in most days. I think that it is going to suit a lot of people who now have the choice of having lower cost accommodation in more remote suburbs or move to even more rural settings. Working from home removes the need for commute, which as everybody agrees is not the best use of people\u2019s time. For those who would prefer to work from home more permanently we have actively invested in equipment for staff across territories. <\/p>\n\n\n\n Accelerated Payments plan to continue as we started. Whilst we have had opportunities to grow more rapidly, we have chosen to run the growth race at a pace where we can understand precisely what is happening. We are constantly looking and analysing the parameters of growth and the consequences of changing each aspect or perspective. <\/p>\n\n\n\n Many FinTech companies have expanded for the sake of expansion grabbing at the market. But \u2013 there is a direct and obvious consequence of this in terms of quality of the book and their ability to apply enhanced learning. <\/p>\n\n\n\n Saying this, Accelerated Payments\u00a0continues\u00a0an ambitious path\u00a0to grow our global book.\u00a0I\u2019m very passionate about adapting technology as a means for\u00a0improving client experience\u00a0and\u00a0combining it\u00a0with\u00a0our deep\u00a0knowledge and\u00a0skills of the team.\u00a0Longevity for SMB funders must be based on a business strategy that ensures continuity through\u00a0several\u00a0business cycles and credit cycles\u00a0and an understanding\u00a0of issues businesses will face in the downs and as well as the ups.\u00a0Our team\u00a0reflects this with those who have 20-30\u00a0years\u2019 experience\u00a0in the banking and SMB funding sector\u00a0sitting alongside individuals who are relatively new to the sector.\u00a0It is\u00a0a perfect balance between reactivity vs. risk\u00a0and we have produced a model<\/a> than can work with this. <\/p>\n\n\n\n Here at Accelerated Payments we remain open for business and positive in our future and the future of our clients. <\/p>","protected":false},"excerpt":{"rendered":" Getting funds to SMEs is the new imperative across the globe as nations look to reopen businesses and get people back to work. The pandemic has thrown accessibility of funding for SMEs into sharp relief and alternative financiers are stepping up to the plate. I talked to one such financier, Ian Duffy CEO of Accelerated […]<\/p>","protected":false},"author":94,"featured_media":2687,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[77,29],"tags":[73,70,80,72],"class_list":["post-2672","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cash-flow-management","category-invoice-finance","tag-alternative-finance","tag-covid-19-2","tag-liquidity","tag-sme-funding"],"acf":[],"_links":{"self":[{"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/posts\/2672","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/users\/94"}],"replies":[{"embeddable":true,"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/comments?post=2672"}],"version-history":[{"count":8,"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/posts\/2672\/revisions"}],"predecessor-version":[{"id":2685,"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/posts\/2672\/revisions\/2685"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/media\/2687"}],"wp:attachment":[{"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/media?parent=2672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/categories?post=2672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/acceleratedpayments.com\/en_us\/wp-json\/wp\/v2\/tags?post=2672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What have you seen in terms of how different countries have responded to Covid-19? <\/h6>\n\n\n\n
What does the future of \u201cnormal\u201d look like? <\/h6>\n\n\n\n
And finally, what does the future strategy look like for Accelerated Payments? <\/h6>\n\n\n\n