92% of SMEs would change lenders in the event of a financing shortage

92% of small and medium-sized businesses globally are ready to switch lenders as digital services become increasingly essential for business owners struggling with finance.

According to a new survey by cloud banking platform Mambu, more than two-thirds (67%) of SMEs have been unable to obtain sufficient or no financing on at least one or more occasions.

As a result, 43% of SMEs have had to rely on friends and family for loans, with this figure rising to 47% among businesses launched since the start of the Covid-19 pandemic.

Among SMEs unable to obtain sufficient financing, 34% told Mambu that they had experienced cash flow problems, while 33% were unable to launch new products or services and 30% were unable to hire effectively.

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Among large SMEs with between 101 and 250 employees, 40% said the inability to access finance had a negative impact on their ability to hire, while 36% said a lack of finance had prevented from developing effectively.

Meanwhile, digital lending solutions have become more popular since the pandemic. 66% of SMEs launched after March 2020 said digital services are an important lending consideration, compared to only 53% of businesses launched before that date.

“SMEs are the engine of the global economy and are responsible for growth, job creation and post-pandemic recovery,” said Eugene Danilkis, Managing Director of Mambu.

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“But they face great challenges. Access to external financing has become difficult during the pandemic due to record demand for financing and increased friction in the lending process. It’s no surprise that SMEs are ready to jump ship for better and more accessible services.

“If lenders want to stand out, they need to transform and modernize their financial experiences to ensure SME success; this includes faster onboarding and loan decisions, harnessing the power of the cloud, and offering mobile and digital-first products.

When it comes to improving the loan application process, the majority of SMEs said they were interested in faster processing of loan decisions (79%), more flexible loan terms (78%), offers and bespoke services (76%), and low or low rates. no collateral requirement (75 percent).

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