How SMEs are using FinTech and cloud tools for Growth and Profitability

There is much talk about the disruption of FinTech innovation, and not much in terms of understanding the business impact. In particular, small and medium-size enterprises, who can benefit in terms of financial leverage, use various online tools to increase productivity, streamline processes, improve reporting and the business balance sheet. In the age of digital innovation, FinTech is providing solutions that can benefit small enterprises as much as it does the retail market. We aim to present a few pragmatic options for you to explore.

Business Loans

First and foremost, following the banking crisis there was a major contraction in credit, hitting small and mid-size enterprises.  There is a new paradigm shift in Small Business Finance, including a few examples below:

  • FundingCircle provide a 30 second eligibility check, with no impact on your credit rating, and has a £60million facility via the government-back British Business Bank.
  • Ratesetter is a peer-to-peer lender offering business loans, which are supported by the government’s British Business Bank. Business loans vary from £25,000 to £1m and it says it can make cash available within 48 hours. The duration is six months to five years and can be cancelled within 14 days without penalties being incurred.
  • Kabbage provides small same-day loans of £1,000 to £40,000 and provides greater real-time business analysis by linking your PayPal and eBay store account as part of their credit analysis.

Some business owners are also concerned with providing a personal guarantee, one of the requirements of most lenders. A new type of insurance can offer protection for this, called PGI Cover.  Should your Personal Guarantee be called upon by the lender, the Insurance will be in place to pay out the indemnified amount which may clear your liability in full.

The British Business Bank (BBB) has also issued a “Business Finance Guide” – from Startup to Growth, providing insight into the process of raising funds. The Bank is aiming to increase SME growth through leveraging traditional and alternative lending options. SMEs are critical to the economy, with 65% of net job creation, and research has found that if the government with institutions such as BBB fail to increase awareness of alternative sources of credit to fuel growth, this could impact the economy to the tune of £20 billion as traditional lenders continue to withdraw from the market.


Receiving payments for goods or services rendered should be a simple process, however in many cases the set-up and implementation are confusing and time-consuming. There are various solutions which aim to deal directly with this issue relating to SME challenges. Businesses can produce invoices by digital accounting and these can be directly linked to automated payments platforms, like the popular PayPal, and tracked and updated accordingly. Other examples specific to business:

  • Ixaris offers payment solutions for a variety of sectors, including financial services and travel. The firm offers “white labelling” options for financial services firms, with their own branding using Ixaris technology. Ixaris facilitates payments to suppliers around the world, and has a “plug and play” API option. It allows firms to receive card payments from Visa and MasterCard.  There are also multiple opportunities for rebates for firms that meet a quota due to the high level of transactions they complete.
  • Another full-service provider is Wirecard – a check-out package for an online shop, credit card acceptance and processing for merchants, as well as SEPA direct debit processing. For those without a debit or credit card, Wirecard offers the facility to make payments directly through a bank account, increasing the amount of people who can purchase your products using Wirecard facilities.

Other companies include Square, a U.S based company who recently IPO’ed, has a range of payments offerings and IZettle, both of which have downloadable software and also offer hardware devices for card payments. Both companies are currently offering free card readers with certain conditions attached.  The software is free to download and provides  the point of sale that takes care of digital receipts, inventory, and sales reports and provides valuable analytics and feedback.

International Payments

Banks currently regard the SME market as niche and don’t properly understand their business needs. International payments are especially difficult and complex for SMEs with hidden fees, poor rates and cumbersome processes. SMEs should definitely consider alternative global money transfer companies instead of using their bank as it is an area of significant cost savings. While the sites are secure and protected, some business owners prefer not to disclose any financial information online – in this case, it is recommended to approach a private FX broker. Always compare rates and fees to your bank, in most, if not all cases, the average business will benefit from significant savings.

  • MoneyMover provides a free international payment review as part of their business assessment, and manages a platform with reporting and analytics and transparent pricing, tailored to your business.
  • The most newsworthy platform, Transferwise, also offers business services. The company manages to offer its services so cheaply by matching up payments with those going the opposite direction using sophisticated software. Transferwise has a simple to use platform and have a devoted fan base in the retail market.


Most SMEs do not have full-time accounting functions, and keeping accounts up-to-date can be time-consuming and often take valuable resources from taking care of the business. There are a few alternatives which provide easy to use, intuitive and reasonably priced digital solutions, which integrate and auto-update from bank statements.

Xero Xero’s popularity is based on having a simpler, easier approach to small business accounting.  Instead of forcing you to use complex accounting functions if you don’t need them, Xero streamlines things

  • Xero’s popularity is based on a simpler, easier approach to small business accounting and streamlining processes. SME businesses have a significant advantage using cloud based platforms due to the ability to easily migrate and scale up.  Xero provides functionality for different stages of business growth and integrates with various other systems including payroll; and streamlines processes if you work with an accountant.
  • Freshbooks provide bookkeeping services, including invoicing, expensing, tracking and reporting and is available on a trial basis. Additional functionality includes automated payment reminders to follow up with late payers, another key component to keep cash flow fluid.

The traditional players in the market are also constantly improving their offerings and these include:

  • QuickBooks aims to simplify business life for consumers, small businesses and accountants with products that are easy-to-use and intuitive. These products focus on helping small businesses manage their money, pay their employees and get paid faster.
  • The market leader, Sage, has increased their offering to deal with the various pain points of businesses, including integration with payroll and pensions auto-enrolment. The new challenges faced by SMEs are particular to regulation and compliance, and the company has been working to incorporate multiple requirements across the various spheres of business regulation.

With the U.K government’s introduction of the Enterprise Bill, the government aims to reduce SME costs by $10 million per year, hastening payments with cash as the key commercial component.  This support is in the event of payment disputes and early intervention to enable faster insurance claims payments. The Prompt Payment Code (PPC) sets standards for payment practices and best practice and has been updated and strengthened to provide an improvement in the payment culture.

What are your experiences using new FinTech products? We would love to hear from you, please post your comments or or get in touch.

Next in the Series:

  • The new Challenger Banks and improving working with SMEs
  • Big Data – what does it mean for the Small Business
  • Can Small and Medium business benefit by purchasing insurance coverage online?

I am passionate about technology and innovations in financial services adding value to Small and Mid-size business in a practical way.  I work as a co-founder at StrongJones, aiming to bring innovation to the key asset within all enterprises – cash. Follow me on @Feliciatedx

Akoni helps businesses make the most of their cash. Follow us on Twitter @akonihub or connect with us here.


About the Author Panos

Akoni CTO

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