What are SME financial services and what are they for?
This support is offered by banks and financial institutions to facilitate and streamline the tasks related to the start-up and daily management of the business, thus helping SMEs to overcome one of the obstacles they face: the lack or absence of resources.
Now, what are they used for? Because the needs of each company vary, according to their stage and level of growth, financial institutions have services with different characteristics that you can use for:
- start a business
- pay suppliers
- pay debts
- purchase machinery
- purchase real state or remodel
According to the report “Financial Characteristics of Companies” prepared by the Ministry of Economy, Development and Tourism, 72,3% of the companies in the country request a credit and/or loan to finance working capital, 39.1% to acquire machinery, equipment, vehicles, etc., and 26.1% to refinance or pay other debts. According to the report “Financial Characteristics of Companies” prepared by the Ministry of Economy, Development and Tourism, 72.3% of the companies in the country request a credit and/or loan to finance working capital, 39.1% to acquire machinery, equipment, vehicles, etc., and 26.1% to refinance or pay other debts. And although these services are an excellent alternative to access a source of financing for SMEs, it is important that you evaluate the advantages and disadvantages to determine if they are the right option, considering the current situation and needs of your company.
Advantages of the financial services for SMEs
- Acces to inmediate financing
- You choose the most favorable payment conditions, according to the options offered by the financial institution.
- You can plan your payments in advance because the conditions are previously signed in a contract.
- Financial entities keep you updated on the status of your debt and pending payments.
Disadvantages of the financial services for SMEs
- You may require collateral or payment guarantees.
- Some institutions charge fees as well as interest.
- You acquire a long-term debt that you must consider in your SME’s finances.
- The process to authorize financing may require background information that is tedious to provide.
What are the most important financial services for your SME?
1.Checking account
- automatic teller machine
- teller window
- checks
- electronic transfers
It also allows you to schedule automatic payments, whether for services, taxes, even your employees’ salaries, so it is a service that significantly facilitates the control and daily management of your money.
