Cost of working capital finance soars for SMEs, survey finds

A global survey of SMEs has found a “precipitous rise” in the cost of working capital finance, as well as growing concerns over late or extended payments from SMEs’ customers. Carried out by working capital marketplace C2FO in December 2020 and January 2021, the survey quizzed more than 6,700 representatives from SMEs in Europe, North America and Asia Pacific on their working capital health. Though the vast majority said they had enough liquidity on hand to survive for the next six months, C2FO says there has been a sharp increase in the cost of short-term working capital finance that appears to be concentrated in the SME market. “While it’s heartening that many SMEs in this survey have a positive outlook for their immediate future, it is also very clear that more needs to be done to provide these businesses with immediate access to the low-cost liquidity they need to grow,” says C2FO’s founder and chief executive Alexander Kemper. Around two-thirds of respondents reported that the cost of borrowing for working capital purposes is over 8% APR, and a lack of low-cost financing options was found among SMEs in all 16 markets targeted by the survey. In the last year, it… continue reading

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Source: CTRM Center

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