Starting a business comes with its own set of difficulties but maintaining a business is the larger challenge. When it comes to small and medium businesses, money management is one of the main challenges they are faced with worldwide. Some of the most recognisable brands in the region have shut their doors due to financial losses and bankruptcy, including the 162-year old Singapore department store, Robinsons, and souvenir chain, Naiise Iconic. According to a survey with 1,000 SME founders from Asia, businesses are most likely to fail because of an inability to manage costs or anticipate rising costs.
As per a recent UNESCAP report, many respondents in diagnostic studies of SME development perennially cite the common complaint that access to finance is inadequate. The study also highlights that financing constraints play an even more critical role later on, when operating SMEs are seeking to expand and develop, but lack access to sufficient long-term funding sources in particular.
Capital is crucial not only for a business to run but for it to thrive. Limited access to the right financial services and tools is one of the main areas where SMEs struggle. They are more often than not struggling to cover daily operational costs to somehow manage their essential expenses such as payrolls, and are therefore unable to pursue a path of exponential growth.
According to a 2020 report by Oracle NetSuite, more than half of the top 10 challenges faced by small businesses involve finance. From limited or inconsistent cash flow to inadequate capital, funding can make or break small businesses in one way or another.
This is not only a challenge uniquely faced by SMEs during a precarious time. Corroborating this report is an earlier study by Synergix Technology conducted in 2019 which concluded that “finance-related problems are an ongoing issue for all businesses worldwide including SMEs in Singapore. Regardless of the operational sector, enterprises will more likely fail to succeed if they are not able to maintain a sustainable financial condition.
This is where the right fintech tools and services can help small and medium businesses tackle the issue of money management and thrive in the competitive market. One such company that is making strides in this direction is Finaxar.
Finaxar is a financial service provider focused on providing SMEs access to working capital so that they can supercharge their business towards accelerating growth. “We streamline the E2E process of providing short-term working capital, enabling digital payments, and facilitating expense management from one centralised platform using the power of technology,” shared Dr Tan Sian Wee, Group CEO of Finaxar.
Solving money management challenges faced by SMEs
Founded in 2016 and serving primarily the Singapore market with its focus on changing the way small business financing is done using technology, Finaxar is a Singapore-based fintech firm that is solving working capital challenges faced by SMEs
Finaxar finances directly from their balance sheet to provide innovative data-driven credit and payment solutions. In July 2019, with the support of Enterprise Singapore, the firm cemented its Lending-as-a-ServiceTM in a new cross-border partnership with Cathay Financial Holdings and Indovina Bank to improve access to SME financing in Vietnam — setting a milestone of its first overseas market beyond Singapore. In the firm’s vision to digitising SME finance, Finaxar grew its capabilities in 2020 with a “Buy-Now-Pay-Later” solution for businesses in the B2B sector — on top of their existing Finaxar Credit Line, which enables business payments through a single, integrated platform that aligns seamlessly with businesses’ cash flows to provide rapid liquidity to SMEs.
Flex by Finaxar, powered by Visa: A unified spend management solution
Last year, when many small and medium businesses were struggling to survive and capital was one of the top concerns across the industry, Finaxar announced the launch of Flex: A unified spend management solution jointly developed in partnership with Visa. With the aim of providing businesses with a platform to unify spend, payables and receivables, the solution was launched in line with Finaxar’s focus to transform SME finance through digitisation. With Flex by Finaxar, businesses now have access of up to S$100,000 in interest-free credit within 48 hours.
“Our initial journey as an SME lending company gave us the opportunity to speak with our SME customers, which allowed us to validate some severe gaps in accessing working capital in Southeast Asia. With the digital ecosystem landscape dramatically changing, we had the chance to innovate our core capabilities to support SMEs in a more purposeful and meaningful way, at the scale and speed that is beneficial to everyone.” shared Dr Tan.
He added, “We were able to leverage our ability to underwrite SMEs efficiently, providing them with short-term working capital to fuel their business, and enabling them to gain more transparency and control over their finances. As a financial services provider, we introduced Flex to ease the process of applying for working capital and facilitate the convenience of managing business payments using digital capabilities in a secure, efficient, and low-cost manner.”
With changing consumer behaviour and a landslide shift towards online payments amidst the pandemic, digital payments have become the most preferred method in Singapore, and SMEs need to be ready for that. They need holistic and agile solutions for better money management. In line with that, the Flex solution comes as both a virtual and physical corporate card — a key feature made available only to businesses in Singapore and is part of Flex’s all-in-one spend management solution. Flex enables easy reconciliation and integration into existing accounting tools to help SMEs keep track of the payments that require reimbursement.
Employers can empower employees to make payments via corporate cards without prior approvals. This can be done by setting customisable parameters such as monthly amounts loaded to the cards, controlling specific expenses (e.g. transportation, entertainment, bulk purchases) and more. All expenses will be captured by the Flex platform for easy reconciliation and seamless reimbursements, thus improving the efficiency of SMEs.
Flex by Finaxar provides a three-fold money management solution
Flex’s proprietary solution that covers working capital provision, instant card issuance and spend control management is the first of its kind in Singapore. With an interest-free, fee-free credit line of up to 35 days with adjustable billing periods, it eliminates friction points and hidden costs typically associated with traditional lending.
“We facilitate cross border payments with zero FX markup, and domestic payments on Flex are free for our clients. It is simple to apply, fast to get a credit line and very affordable for small businesses. We continue to innovate our platform with SME customers’ need for better control of their expenses in mind,” added Dr Tan.
Flex’s all-in-one financial management platform enables SMEs to:
- Regulate their spending: Businesses can determine exactly where and when the money was spent by setting up request-approval workflows and customising spend limits.
- Manage their spending: With the issuance of physical and virtual Flex Visa corporate cards, businesses can capture and monitor invoices, initiate payments and reconcile their payments using their accounting software via a single platform.
- Track their transactions: Using real-time spend insights, businesses can obtain an up-to-date, accurate, and comprehensive financial outlook — and easily integrate into any existing accounting software.
“We are not a technology company attempting to provide financial services. We are a true financial services company which leverages the depth of our team’s long backgrounds in finance. Today, we leverage the power of technology to better serve the SME community, aiding their ambitions to grow without limits,” concluded Dr Tan.
Interested in improving your startup’s finance management and maximising business growth potential? Learn more about Flex by Finaxar at https://flexnow.co.
This article is produced by the e27 team, sponsored by Finaxar
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