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The secret sauce for SMBs to grow in an uncertain economy

Niva KaraNiva Kara
March 12, 2023

Small and medium-sized businesses looking to grow and expand are often limited by a lack of working capital, especially when interest rates on loans are high like they are today. Payoneer’s Capital Advance program was designed to help SMBs overcome that barrier and actualize their full potential.

Working capital and SMBs

Street wisdom says that it takes money to make money. It isn’t just a myth either—in many cases, large businesses grow quickly while small businesses often end up staying small.

Why is that? One of the key challenges is that small businesses often run out of cash to pay their expenses. have limited, or even negative, working capital. Working capital is the difference between the company’s assets—things the company owns that can be turned into cash in the next 12 months—and the company’s liabilities, which are the expenses that the business incurs during that time. Or in more simple terms, keeping your cash flowing so you have enough money to pay for your endless business expenses.

The Catch-22 of small business growth

The amount of working capital a business needs varies by the type of business. For example, businesses that have physical inventory need more working capital overall—you need to buy inventory to sell inventory.

Let’s say you’re selling customized cellphone cases online. You sold 500 units last month, but the holidays are around the corner and you think that you can sell double that amount, a thousand units, in the coming month. The problem is that you have to buy—and pay for—-the entire amount in advance, and your profits from last month aren’t enough to cover the purchase. In other words, your lack of working capital is preventing your business from realizing its full potential.

Manufacturers that produce physical goods have the same problem—they also need working capital to purchase the raw materials they need to produce their products. Some businesses that don’t have inventory—freelance service providers or software companies for example—also have a cash flow gap since they often have long waits until they are paid, and expenses like salaries, taxes, and rent can’t wait. Furthermore, most businesses need to in significant amounts of advertising in order to grow. That advertising requires funds that small businesses simply don’t have on hand.

With Payoneer’s Capital Advance, SMBs have more options than ever to grow their business, even in today’s challenging conditions.

Tell me how I can get working capital for my business

How can an SMB access more working capital to fund growth?

Any type of SMB that is looking to expand into new product lines and markets, or increase its online presence, needs more working capital than other businesses do. In order to enable that type of expansion, they need to invest in things like market research, design, testing, and more—all of which have significant costs—before they start generating any new income.

SMBs can try to minimize their expenses in order to increase their working capital, but in the current economic climate characterized by high inflation, that isn’t always possible. Loans can help SMBs increase their assets, but it isn’t easy for small businesses to qualify for a loan from a bank or traditional lender. In fact, many SMBs are “unbankable” or “underbanked” and either can’t or prefer not to work with traditional banking services.  In addition, since interest rates are at a decades-long high, even if they are able to secure a bank loan, paying it back can be difficult.

Last but not least, SMBs often need funds fast to make the most of business opportunities that come their way. Since it takes time, paperwork, and collateral to get a bank loan, SMBs miss time-sensitive opportunities while waiting for a bank loan to be approved. So, what’s an ambitious small business to do? Is there no way for SMBs to take advantage of the current market potential?

A new way to realize growth

Online and alternative lenders are stepping in to fill the gap, offering small businesses working capital solutions based on their business activity. That’s why we launched Capital Advance, a new Payoneer program that allows SMBs to leverage opportunities for growth by offering funding with simple, streamlined terms and conditions. The service offers up to $80,000 in instant funds based on your business’ performance. All that without the tedious paperwork that banks require. The terms and conditions are quite simple, and owners just have to pay a fixed percentage of future payments to their Payoneer account. That means that any small business can invest in growth, without worrying about how the investment will impact its bottom line.

Want to know how much your business is eligible for? As soon as you start getting paid in your Payoneer account, we can calculate your offer automatically.

The bottom line 

The current economic conditions are a bit of a mixed bag for small businesses.  On one hand, the world is emerging from the pandemic and unemployment is at a historic low, opening a lot of opportunities for small businesses to thrive and expand. On the other hand, high interest rates and inflation make it difficult for SMBs to invest in growth-boosting activities.

But with Payoneer’s Capital Advance, SMBs have more options than ever to grow their business, even in today’s challenging conditions.

Tell me how I can get working capital for my business





The content provided in this article including any information relating to pricing, fees, and other charges is accurate and valid only as of the date it was published. In addition, changes in applicable regulations, policies, market conditions, or other relevant factors may impact the accuracy of the mentioned pricing and fees and other associated details. Accordingly, it is further clarified that any information regarding pricing, fees and other charges is subject to changes, and it is your responsibility to ensure you are viewing the most up to date content applicable to you. Payoneer will provide the most up to date and accurate information relating to pricing and fees as part of the account registration process. Registered customers can view this information via their online account.

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