How to prepare an SME to overcome the impact of Coronavirus?

The impact of coronavirus is pretty deadly. Perhaps, it is hard to remember a virus threatening the entire market. This global pandemic has brought about a severe downfall in the market. It is fitting to say that the complete lockdown of cities due to pandemic has brought about the second recession.

There is no hiding the fact that small and medium enterprises are the backbones of every economy. The more these small and medium enterprises develop, the more they will help the economy grow and increase their chances of sustaining in a volatile market. However, as mentioned, the pandemic has caused havoc in the world of SMEs. The rapidly growing market has been struck by a lightning bolt! To make matters worse, the market has entered the bear market phase and there is no idea as to when will things change in a positive direction.

As COVID becomes an overgoing threat to small and medium enterprises, here are a few things that they can do to prepare themselves for the survival challenges lying ahead.

Disaster Funds:

Understandably, the biggest struggle in today’s scenario for a small and medium cap enterprise is going to be the absence of steady cash flow. Having steady cash flow is more than just assurance for an SME owner. 

This helps them to sustain and expand. However, the spread of pandemic has created a disruption in their assurance. And, one knows what to expect from traditional channels in these circumstances. For this reason, an SME owner can opt for simultaneous funding options like that of alternative financing firms like Mantis Funding.

These firms are working behind the scenes to provide relief cash in the form of merchant cash advance and other services. Thus, helping an SME owner to secure disaster funds for his firm in a very crunch situation.

New assumptions for a revised budget:

Perhaps, this is the time to shed some liabilities and focus solely on what’s really important for the firms. Your current budget won’t work in this current situation rather it will take more cash out of your pocket. As Mantis Funding reviews the current scenario, it is apt to say that working with an accountant to devise the possible impacts of the market on your budget is a wise idea.

Income support to the employees:

This is a testing time for both, the owners and their employees. At this very moment, they need your support. Possibly, this is the reason why it is said that an enterprise is like a family. However, given the scratchy cash flow of your enterprise, it would be quite understandable that you are under considerable pressure to meet the demands of the payrolls of your employees. For starters, you can opt for what other CEOs are doing. They are first taking a self-pay cut before telling their employees about it. In this way, you both will be on ground zero and no one will feel undone by the performed action.

However, if you don’t want to act on this, there are alt-fin firms who will readily agree to help you. Firms like Mantis Funding have exclusively designed their services with flexible payments in a way that they can help you in the best of their capacities.

A Look At How Alternative Lenders Help Healthcare Practitioners

Doctors operating out of their own practices or clinics must also stay on top of the business side of their work. They also have to manage expenses, meet payroll, manage employees, and conduct various other activities that come with running their own business set-up. While one wouldn't equate doctors as struggling for cash, they do face their fair share of tight cash flow situations and can certainly use the services of alternative lending institutions to make operations flow a bit more smoothly.

How can alternative lending institutions help doctors?

Working capital: As most patients come in through heath insurance companies, getting insurance companies to make payments on time, and minimizing the risk of invoice rejection is a continuous task for all healthcare professionals. Delayed payments by insurance companies are one of the biggest reasons for cash flow hiccups faced by medical practitioners.

While cash runs low, the expenses of meeting payroll, utilities, insurance, and similar expenses remain urgent and constant. Here an alt-lender can help.

An alternative lender such as the New York-based Mantis Funding offers medical professionals a variety of financing options. The two most popular ones are Merchant Cash Advance (MCA) and Business Line of Credit (LoC). Mantis Funding reviews applications for both these options based on the transactional data or the business and the credit history of the business owner.

An MCA is a lump sum cash payment, which is repaid by deducting a percentage of daily or weekly sales revenue. This is a simple solution for short-term, one-off cash flow shortages. A line of credit, on the other hand, offers long term relief; it provides a revolving flow of credit wherein practitioners are given a credit line with maximum value and can withdraw the amount they need at will.

Growth capital: Medical technology is changing and evolving continuously, and in the last decade, the pace of innovation has quickened. In order to offer their patients the best treatment options, healthcare professionals must keep upgrading their equipment. However, medical equipment is very costly and almost impossible to afford without financing.

Alternative online lenders have special equipment financing offers for medical professionals, which help them get the latest technology but without stressing their cash reserves. Most alt-lenders like Mantis Funding offer two equipment financing options – leasing and purchasing.

Equipment leasing is best for equipment that evolves and becomes obsolete very quickly. As leasing is almost like rental, there is no down payment or collateral required for it.

Equipment purchase financing is recommended for business-critical equipment that has a long shelf life. Here the piece of equipment itself serves as collateral and drives down repayment costs. But in most cases, the buyer is expected to put provide a down payment.

In both these funding options, Mantis Funding reviews the client applications based on their business needs, cost of the equipment, financial records, and other business transactional data.

Final Thoughts: To keep things ticking along smoothly, medical practitioners need to keep their business cash flow in the green. The long-term solution is naturally to make your collection process watertight, reduce errors and delays as much as possible. However, even with perfectly coded claims from their side, insurance companies usually take months to pay.

It is best to factor these delays and plan around them by getting in touch with alt-lenders well in advance. With help from lenders like Mantis Funding, healthcare businesses can easily manage day-to-day expenses AND invest in their growth without being hindered by the lack of ready cash.

Why Did The World See An Explosion In Alternative Financing?

There has been an explosion in the alternative financing industry over the last decade. Alternative lenders like Mantis Funding are fast emerging as the reliable go-to option for SMEs looking for quick credit disbursals. But what caused this explosion? Let's examine more in-depth.

The Unwillingness Of Banks To Support SMEs

After the last recession that shocked the world some ten years ago, traditional banks have been way tighter with their purse strings. Bound by government regulations, they follow stringent conditions/standards, which make it hard for many applicants, especially small business owners. These approval criteria include high credit scores and substantial collaterals.

This reluctance of traditional banks in supporting SMEs created a void that alternative lenders could fill. Startups and SMEs have bloomed around the same time, and there was a significant need for non-traditional financial institutions to take over the vacant space left by banks.

For example, alternative lenders like Mantis Funding are doing their best to support SMEs and startups to grow and expand. All this without asking for high FICO scores or collaterals.

The High Demand For Quick Cash Flow

Time and again, the extensive wait at the banks, to approve a funding application, has proven to be a significant deterrent for startups and SMEs facing tough competition in the ever-changing market. In the fast-paced business world, cash flow needs to be quicker and smoother. Since traditional banks couldn't fill in the blank, alternative lenders emerged.

Alternative lenders like Mantis Funding reviews each application fast to disburse the loan within a few days of applying.

Decreased Patience For Extensive Documentation Hassles

When time is money for each busy professional, it isn't surprising that businesses are unwilling to go through extensive documentation filings. Banks are well-known for their tiring paperwork and long waits. With a fast-developing SME economy, there was an immediate need for lenders who would facilitate cash flow without consuming too much time in paper filings.

Thus, alternative lenders who posed no such hassles were able to capture the market. Such lenders like Mantis Funding review each application in the minimum time possible, thus, further reducing the overall wait time and hassles.

Marketplace And High Worth

The marketplace and high worth of the alternative lending industry can be well-assessed by the Chartered Institute of Credit Management article published in 2018. Through a closed group survey, the report stated that only 26% of SMEs thought that their bank could meet their funding needs. In 2019, the transactional value of the alternative lending industry has been around USD 267,123.6 million.

SMEs are highly concerned about their long-term sustainable growth and understand the crucial need for cash flow to refuel themselves. Even after ten years, banks are still reluctant to finance startups and SMEs. And this, in gist, is the biggest reason alternative lenders flourished in the first place. But with Fintech-led automation, alternative lenders have fast evolved from last option to the preferred choice. The alternative lending industry story is only going to get better over the next decade.