External financing as a lifeline for logistics companies, FMCG firms and sellers on Allegro. At a time when the Polish economy is facing difficult epidemiological challenges and local companies have problems with financial liquidity, a helping hand is being extended by entities offering new financing opportunities, supported by the most modern technologies.
While 53 percent of micro-enterprises and 56 percent of small companies report difficulties in obtaining credit from traditional financial institutions, fintech offerings are becoming increasingly popular and can be an excellent alternative to many other forms of support. According to a new report by Million Insights, the global market for digital financing platforms is expected to reach $15.3 billion by the end of 2026.
Troublesome payment gridlock
Troublesome payment gridlock
During the global coronavirus pandemic, one of the greatest challenges for the Polish economy and an obstacle to doing business is payment gridlock. Entrepreneurs who regularly do not receive timely payment for delivered goods or services are unable to meet their obligations to subcontractors.
For smaller companies, these are real problems that increase their operating costs and hamper growth. Data from the last quarter of 2020 indicate that the problem of invoices overdue by more than 60 days affects nearly half of entrepreneurs in the SME sector. A lack of financial liquidity can threaten a company's survival and the retention of jobs.
New opportunities for fintechs
New opportunities for fintechs
The global market for digital financial support platforms is expected to reach $15.3 billion by the end of 2026. In the current situation, where the global pandemic makes it necessary to limit personal contact, fintechs provide unlimited access to financial services without having to leave home. The market is growing at a truly rapid pace. Forecasts for 2019-2026 assume a compound annual growth rate of 20.7 percent. Access to the solutions offered by fintechs providing financial support from any mobile device makes this market highly susceptible to rapid growth.
Why fintechs are on the rise during the pandemic
In recent years, the importance of the fintech industry has grown. Thanks to mobile apps and technological development, users can not only manage their money 24/7, but also perform additional activities such as instant transfers, borrowing money or investing in shares. The coronavirus has only accelerated the expansion of such companies. Small businesses are increasingly choosing digital lending platforms because of their user-friendly interface. According to the latest data, the use of fintech apps increased by 72 percent in Europe during the pandemic.
Need quick financial support? All you have to do is provide a bank statement
Quick support for SMEs
Access to quick financing can be a key opportunity for SMEs from various industries, such as logistics, construction or smaller companies in the FMCG sector. That is why the offer of fintechs such as Lidya can prove very attractive to Polish entrepreneurs. Fewer formalities and a fast decision-making process combined with lightning-fast customer service - all of this is now available from their own offices, with just a few clicks online. In a few simple steps, companies can obtain financing in a fast and secure way.
Before long, this type of solution may prove crucial in supporting businesses and jobs in unstable times. Flexibility, convenient service, speed and a focus on smaller companies are what set fintechs apart from traditional banking institutions. The combination of these elements can be a lifeline for SMEs.
Summary
The coronavirus pandemic has increased the importance of fintechs as an alternative to traditional loans, especially for SMEs struggling with payment gridlock. The Million Insights report indicates that the global market for digital financing platforms will reach $15.3 billion by 2026, growing at a rate of 20.7 percent annually. In Europe, the use of fintech apps increased by 72 percent, confirming the accelerated digitalization of services.
Fintechs such as Lidya offer quick financing based on a bank statement, which is attractive for companies in the logistics, construction or FMCG industries. Although the text is promotional in nature, it highlights the real need for flexible financial support in unstable times.
