Business
Businesses at a time of recession: how alternative finance options are helping companies survive and thrive
Published
5 months agoon
By
admin
Ian Duffy, CEO, Accelerated Payments
While the current landscape is challenging for all businesses, it is crucial to remember that crises can drive innovation and create new opportunities. Recessions have led to the growth of the most well-known companies on the planet: Disney was started alongside The Great Depression, Microsoft began during an economic downturn, and FedEx was launched during a recession too.
The crucial element for any growing company is to quickly and easily obtain the finance to grow. Unfortunately for many business owners, banks are becoming less of an option for raising capital as the past decade has changed how traditional banks deal with businesses.
This has paved the way for the emergence of game-changing alternative finance providers, which are helping business owners grow faster than ever. These include revenue-based finance companies, merchant cash advance providers, and invoice finance leaders – all of which are more accessible than traditional banks, and with seamless user experiences. Each of them has its unique benefits and use cases.
Revenue-based finance providers are when lenders provide finance based on a percentage of a company’s future revenue. If a company applied for a £10,000 loan, it might agree to pay back 5% of their monthly revenue until the loan is repaid, plus a monthly fee. This option does not require founders to offer collateral, nor do they need to provide equity in their business.
If the market changes or sales decrease, repayments will also slow too, which is favourable for businesses affected by factors beyond their control. Revenue-based finance is an ideal avenue for new but growing companies searching for quick access to cash without giving away equity or spending time raising capital – such as eCommerce providers with a solid local audience who want to expand to another territory.
Another financing option for businesses during a recession is merchant cash advance providers – similar to the revenue based model in that they provide cash in exchange for a percentage of future sales. This type of finance is often used for physical brick-and-mortar businesses like restaurants, hospitality or retail businesses that see fluctuations in trade.
The amount a business can borrow typically depends on the credit rating, sales projections, and business size. Businesses repay according to a factor rate, a multiplier that depends on the business’s credit score. Generally, this form of finance is used for the short term and is flexible, and can be helpful for refurbishment or purchasing inventory – for example, when a restaurant wants to take advantage of a quiet period to expand its premises.
Lastly, Invoice Financing is a powerful option for businesses whether there is a recession or not. In boom times, companies need to raise capital quickly to accelerate business growth; in recessions, Invoice Finance can be a critical pillar of supporting cash flow. However, recently, Invoice Finance has been a lifeline for those companies increasing exports to countries outside the EU post-Brexit.
Over the past couple of years, 87 per cent of small business owners in the UK have reported losing money. The UK Invoice Finance sector has played an essential role in helping businesses to recover, with research revealing that 27 per cent of companies (with a turnover of between £1M and £500M) use Invoice Financing.
Invoice Financing works through the finance provider using an invoice as security for funding. Invoice finance providers quickly give access to a percentage of an invoice’s value, which can be especially useful for businesses with large corporate clients whose payment terms can range from 90 to 120 days.
Finance providers gauge which invoices to fund by using a client portal that allows businesses to upload and select invoices for funding – once approved, payment is advanced to the company, usually within 24 hours. This speed is crucial as the faster the business can obtain that revenue, the quicker it can be reinvested.
This reinvestment could be in a new marketing campaign, part-time staff, or software that can drastically improve operations. It can be particularly helpful when an established business is looking to experiment with a brand-new area of business.
Recession or not, while it is well-known that half of new businesses do not survive the first five years of their business – the ones that do survive need strong cash flow.
No matter how a business raises capital, what matters most is that it can do so quickly and easily. This new variety of options means that strong, resilient companies will not be knocked down by the winds of recession but instead will use the challenging environment as an opportunity to regroup and access new means of finance for growth.
Business
Unlocking the Power of Data: Revolutionising Business Success in the Financial Services Sector
Published
16 hours agoon
June 8, 2023By
admin
Suki Dhuphar, Head of EMEA, Tamr
The financial services (FS) sector operates within an immensely data-abundant landscape. But it’s well-known that many organisations in the sector struggle to make data-driven decisions because they lack access to the right data to make decisions at the right time.
As the sector strives for a data-driven approach, companies focus on democratising data, granting non-technical users the ability to work with and leverage data for informed decision-making. However, dirty data, riddled with errors and inconsistencies, can lead to flawed analytics and decision-making. Siloed data across departments like Marketing, Sales, Operations, or R&D exacerbates this issue. Breaking down these barriers is essential for effective data democratisation and achieving accurate insights for decision-making.
An antidote to dirty, disconnected data
Overcoming the challenges presented by dirty, disconnected data is not a new problem. But, there are new solutions – such as shifting strategies to focus on data products – which are proven to deliver great results. But, what is a data product?
Data products are high-quality, accessible datasets that organisations use to solve business challenges. Data products are comprehensive, clean, and continuously updated. They make data tangible to serve specific purposes defined by consumers and provide value because they are easy to find and use. For example, an investment firm can benefit from data products to gain insights into market trends and attract more capital. These offer a scalable solution for connecting alternative data sources, providing accurate and continuously updated views of portfolio companies. Using machine learning (ML) based technology enables the data product to adapt to new data sources, giving a firm’s partners confidence in their investment decisions.

Suki Dhuphar
But, before companies can reap the benefits of data products, the development of a robust data product strategy is a must.
Where to begin?
Prior to embarking on a data product strategy, it is imperative to establish clear-cut objectives that align with your organisation’s overarching business goals. Taking an incremental approach enables you to make a real impact against a specific objective – such as streamlining operations to enhance cost efficiency or reshaping business portfolios to drive growth – by starting with a more manageable goal and then building upon it as the use case is proved. For companies that find themselves uncertain about where to begin their move to data products, tackling your customer data is a good place to start for some quick wins to increase the success of the customer experience programmes.
Getting a good grasp on data
Once an objective is in place, it’s time for an organisation to assess its capabilities for executing the data product strategy. To do this, you need to dig into the nitty-gritty details like where the data is, how accurate and complete it is, how often it gets updated, and how well it’s integrated across different departments. This will give a solid grasp of the actual quality of the data and help allocate resources more efficiently. At this stage, you should also think about which stakeholders from across the business from leadership to IT will need to be involved in the process and how.
Once that’s covered, you can start putting together a skilled team and assigning responsibilities to kick-off the creation and management of a comprehensive data platform that spans all relevant departments. This process also helps spot any gaps early on, so you can focus on targeted initiatives.
Identifying the problem you will solve
Now let’s move on to the next step in our data product strategy. Here we need to identify a specific problem or challenge that is commonly faced in your organisation. It’s likely that leaders in different departments, like R&D or procurement, encounter obstacles that hinder their objectives that could be overcome with better insight and information. By defining a clear use case, you will build a real solution to a challenge they are facing rather than a data product for the sake of having data. This will be an impactful case study for your entire organisation to understand the potential benefits of data products and increase appetite for future projects.
Getting buy-in from the business
Once you have identified the problem you want to solve, you need to secure the funding, support, and resources to move the project ahead. To do that, you must present a practical roadmap that shows how you will quickly deliver value. You should also showcase how to improve it over time once the initial use case is proven.
The plan should map how you will measure success effectively with specific indicators (such as KPIs) that are closely tied to business goals. These indicators will give you a benchmark of what success looks like so you can clearly show when you’ve delivered it.
Getting the most out of your data product
Once you’ve got the green light – and the funds – it’s time to put your plan into action by creating a basic version of your data product, also known as a minimum viable data product (MVDP). By starting small and gradually enhancing with each new release you are putting yourself in the best stead to encourage adoption and also (coming back to our iterative approach) help you secure more resources and funding down the line.
To make the most of your data product, it’s essential to tap into the knowledge and experience of business partners as they know how to make the most of the data product and integrate it into existing workflows. Additionally, collecting feedback and using it to improve future releases will bring even more value to end users in the business and, in turn, your customers.
Unlocking the power of data (products)
It’s crucial for companies in FS to make the most of the huge amount of data they have at their disposal. It simply doesn’t make sense to leave this data tapped and not use it to solve real challenges for end users in the business and, in turn, improve the customer experience! By adopting effective strategies for data products, FS organisations can start to maximise the incredible value of their data.
Business
Making the Maths Work: Addressing Inflation Challenges through Measuring and Managing Risk
Published
1 day agoon
June 8, 2023By
admin
Matt Clementson, Head of Enterprise UK&I
Persistent inflation is highly troublesome for every business – with or without a recession. In addition to causing unexpected expenses, it complicates decision-making around stabilising wages, setting product prices, and investing in new areas for growth. Meanwhile, stock and bond prices plummet when alarming inflation data arrives and interest rates increase. It’s time to run leaner, making the reassessment of the strategic objectives highly urgent.
With a seat in the boardroom, CFOs can guide thoughtful discussions covering everything from procurement, resource allocation, and manufacturing to the alignment of business purpose with operational tactics and goals. CFOs must also rethink how their business measure and mitigate risk. Understanding the business’ vulnerability, they can add considerable value to their business by identifying risks early and making organisations accountable for mitigating them.
When the economy becomes uncomfortable, the mathematics behind business operations no longer work seamlessly. During more comfortable times businesses have the luxury to accept some degree of inefficiency and low productivity – but in times like these that’s no longer the case.
So now it’s more important that ever for CFOs to use the right tools and technology to manage and mitigate risk and build business resilience.
Enhancing visibility to measure and manage risk:
To navigate through periods of high inflation, CFOs need technologies that provide comprehensive visibility, and enable informed decision-making, in order to optimising cash flow, minimise costs and manage risk in a transparent and efficient way.
1. Simplify confusing processes to gain moments of clarity
Effective risk management starts with integrating data from various sources within the organisation. By consolidating data from finance, operations, procurement, and sales, CFOs can gain a holistic view of the business landscape. This integration enables them to identify potential risks associated with inflation, such as rising costs, supply chain disruptions, or changes in customer demand patterns. With access to comprehensive and real-time data, CFOs can make informed decisions that mitigate the impact of inflation on the organisation.
A good first step is to unify travel, expense, and invoice solutions, so that finance teams can integrate and streamline operations and scale spend processes without adding additional resources.
2. Make spending decisions with data-driven accuracy
Once data is integrated, CFOs can leverage advanced analytics techniques to identify patterns, trends, and potential risks. Predictive analytics can help identify inflationary pressures, allowing businesses to proactively adjust pricing strategies or negotiate favourable terms with suppliers. Additionally, scenario modelling can simulate the impact of different inflation rates on the organisation’s financials, enabling CFOs to devise appropriate strategies for managing risk. By harnessing the power of analytics, CFOs can navigate inflation challenges with greater confidence and precision.
3.Driving business agility through automation
Facing a myriad of disruptors, companies in every industry are making strategic decisions aimed at remaining competitive in the market and with their people. Digitisation, standardisation, and automation will be critical as businesses focus on solving problems for their customers in innovative, lasting ways
AI technologies, such as machine learning algorithms, can analyse vast amounts of data to uncover hidden insights and patterns. And with automated, customisable controls, CFOs can keep their firm agile – re-adjusting spend controls to match the corporate travel and expense (T&E) policy whenever their business needs to adapt or pivot. Only then will spending insights allow them to review how policies impact business performance and continue to optimise cash management.
Making the maths work
In a business environment plagued by persistent inflation, CFOs play a crucial role in addressing the associated challenges. By rethinking how their organisations measure and manage risk, CFOs can enhance their decision-making capabilities and add significant value. The integration of data, advanced analytics, and AI technologies enables CFOs to build resilience, standardise processes, ensure compliance, and deliver insights to the entire enterprise. By making the maths work in the face of inflation, businesses can navigate uncertain economic times with confidence and stay on the path of sustainable growth.
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