The impact COVID-19 has had on our daily lives is immeasurable, but nowhere is that more apparent than Australia’s small and medium business (SMB) sector.
SMBs are bearing the financial brunt of the current epidemic. You only need to stroll down any street to see cafes restricted to takeaways, personal trainers shutting down their businesses entirely and retailers limiting how many customers can enter stores at once.
SMBs are the lifeblood of the Australian economy, employing just under half of all Aussie workers and accounting for 34% of all industry in the country.
It’s therefore imperative for industries like fintech to do their part in helping struggling businesses that have been hit by an unprecedented scenario to get them back on their feet and reinvigorate the economy.
In order to help SMBs, it’s important to understand the environment these businesses find themselves in. It’s not just about the bottom line; SMBs are also busy juggling their finances, inventory, marketing and customer management, just to name a few.
These tasks are often meant for 15 or so people to handle, but are often relegated to just one or two employees. Business owners are experts in their own business, but that doesn’t necessarily mean they have the time or experience to handle every single function themselves.
So what can fintechs do to aid SMB’s recovery efforts. Luckily for SMBs, even $10,000 can go a long way, and could even mean the difference between staying afloat or collapsing.
Thankfully, some fintechs have acted swiftly to fast-track emergency loans in order to give SMBs fast access to working capital. With the proper support, SMBs can rebound and help lift the economy around them in the process.
Often the biggest challenge for SMBs is that they simply don’t have the time or resources to obtain funding to reverse their fortunes.
Even if they do have time, how do they ensure that they can stand behind the criteria to actually receive a loan? This was a challenge prior to COVID-19 that has only worsened.
The lending process is also at odds with the vast majority of SMB’s recovery strategies, given they require significant collateral as well as significant time investment.
This means that in order for fintechs to help SMBs, it can’t just be about money.
Fintechs also need to help SMBs to find funding, enroll in initiatives and to stand behind their criteria. For that, they require integrated technology to help them enroll and onboard funding, as well as track payments afterwards.
Ultimately, fintechs need to help SMBs to help themselves, while understanding that the road to recovery isn’t paved in gold. Money isn’t a bandaid that can instantly fix the COVID-19 impact.
If fintechs can work hand-in-hand with the SMB sector, we may soon see a light at the end of the tunnel for the backbone of Australia’s economy.
* Max Bluvband is the founder and CEO of AppsVillage