C2FO Working Capital Outlook Survey reveals SME challenges and opportunities

C2FO surveyed more than 2,600 international small and midsize enterprises (SMEs) for their third annual Working Capital Outlook survey. While there were signs of overall economic recovery, SMEs still face uncertainty regarding accessing affordable funding, lack of confidence in customer relationships, and challenging payment terms. However, for every challenge SMEs face, their corporates customers have an opportunity to improve supply chain relationships and health, while complying with new regulations, and enhancing cash management strategies.

Key Findings:

  • Two-thirds of SMEs indicate an increase in need for liquidity from 2016. Their need for liquidity may outpace access to funding
  • SMEs cited finding competitive financing is their biggest challenge, with 31 percent noting high interest rates, not access, as their barrier
  • Alternative sources of financing from fintech companies will be critical to meet increasing demand for affordable funding
  • For 2017, one-quarter of SMEs report an expansion in the number of customers imposing longer payment terms despite new regulations for the EU

The news was covered by the following publications:

  • Cash & Treasury Management File: Borrowing with confidence via alternatives According to the British Business Bank, small to midsize enterprises (SMEs) are becoming less reliant on banks for funding and are shifting their focus to alternative sources of financing. In particular, the smaller sized firms are most reluctant to apply for a bank loan in fear of rejection.
  • Euromoney: Payments legislation not working for SMEs
    Longer payment terms are greatly impacting suppliers’ access to working capital. “Dynamic discounting and supply chain finance programmes are trying to alleviate the problem for suppliers and give benefit to buyers at the same time,” said Colin Sharp, SVP, C2FO.
  • GT News: Cold comfort for SMEs amidst Carillion bankruptcy
    Despite Europe-wide regulations, SMEs are still suffering from late payments, which inhibits business growth and puts a strain on the supply chain. Luckily, this is now changing with the help of early payment solutions such as C2FO – that offer cheaper financing for suppliers and reduced costs for corporates.