Investors have an opportunity – and a responsibility – to help SMEs defeat coronavirus
The COVID-19 crisis has already devastated the livelihoods of talented entrepreneurs across the world, whose businesses are suffering through a situation beyond their control. At a time when countries are asking communities to isolate or social distance, many people feel powerless to help these SMEs. But professional investors are in a unique and powerful position to exercise their skills, offering tangible financial support at this critical moment.
Rapid action is essentialInvestors are used to reading the markets day-by-day and reacting to external influences, but what we’re seeing right now is a situation without parallel. As the Financial Times notes, there’s no playbook from previous global shocks that fits the template for coronavirus – so it’s time to look beyond traditional routes for alternative opportunities. Right now, millions of small businesses across the world are in cash flow crises. And professional and semi-professional investors can fill the credit gap to ensure their survival. The challenge SMEs face is that they need access to capital QUICKLY. While national governments have launched emergency loan schemes, the application process takes weeks. The same is true of bank loans; and many banks are reluctant to lend to small businesses in the first place. With time of the essence, we need to connect businesses with investors in a quick and meaningful way, in which everyone benefits. And WeOwn is among the fintech companies pioneering technology that ensures rapid action is possible.
Alternative opportunitiesTechnology-driven financial services will be the saviour of current economic difficulties, and WeOwn has launched a digital lending marketplace that checks SME eligibility within minutes, matching businesses with suitable lenders within days. We’re now asking investors to sign up to our platform for free, to help SMEs in need. Although many investors are motivated by passion and conviction, we fully understand that decisions need to make business sense – and our approach yields opportunities at a time when traditional markets are in crisis:
- SME progress is independent of volatility in the wider capital markets, offering stable cash flow option
- Small businesses are in the high growth stage of their development, creating greater potential for profit than established businesses that could list publicly
- Connecting directly with small businesses online cuts middlemen out of the equation, meaning profits don’t need to be shared round
- Rising applications for peer-to-peer loans encourage competitive interest rates – although we are keen to keep these fair and affordable for SMEs
- Our independent credit rating approach ensures investors have a neutral and unbiased assessment of each business and its associated credit rating
- Platforms like WeOwn with an in-built secondary market ensure investment liquidity, flexibility and no ‘lock-in’