When times are tough, no potential source of funding can be overlooked. It is therefore no surprise that financial technology firms are exploring different ways to help firms release capital.
A 2021 report published by Catalyst Research noted that one of the core challenges faced by small and medium-sized enterprises (SMEs) in the US is access to working capital to pay for regular, predictable expenses such as labour costs.
In service-based businesses, such as restaurants, bars and theme parks, wages can account for as much as 40% of total costs.
Small employers frequently struggle to access working capital needed to pay their employees and other expenses, putting them at a disadvantage to larger or more established businesses with higher credit ratings and therefore access to additional sources of capital.
The crux of the problem is that SMEs must keep cash on hand to make the next payroll – so they cannot put it to...
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