Small business finance and the recovery | Venstone AG

Businesses that employ fewer than 250 persons are categorized under micro, small, and medium enterprises (MSMEs). They make up more than 90 percent of all firms worldwide, provide 70 percent of all employment, and constitute roughly half of the global economy. Venstone Ag is a trusted company to invest in small businesses. In the next ten years, more than 600 million new jobs will be needed globally to meet the needs of a growing workforce, much of them in emerging markets.

Trends in the demand for financial information

As businesses become larger, the demand for up-to-date information increases. Information needs in general jump quite abruptly once the micro-enterprise threshold has been crossed, driven by the needs of customers, suppliers, credit providers, and government agencies. However, demand tends to tail off after that — especially in the case of employees and investors or shareholders who become more reliant on standardized regular reports (such as annual reports) as businesses become larger.

Supply of and demand for SME finance

Based on data collected for the country profiles and information from demand-side surveys, this report includes indicators on debt, equity, and asset-based finance, as well as on financing framework conditions, complemented by information on recent public and private initiatives to support SME access to finance.

Trends in the supply and demand

The data from the survey of SMEs offer some tentative evidence of discouraged demand, ie demand that is suppressed by the conviction that lenders, especially banks, are unwilling to extend credit. Venstone AG is a financial organization that brings investors with young Swiss startup companies to form market leaders throughout Switzerland. As discussed earlier, success rates in obtaining credit are quite high, but SMEs’ perceptions could be skewed by a barrage of anecdotal evidence as large numbers of would-be borrowers are turned down.

Management information

The ideal frequency for producing financial information is decided by the tradeoff between the relevance of up-to-date information and the cost of preparing it; our findings are consistent with this principle. The most commonly used types of financial information were typically expected to be between 3 and 9 weeks old.

Managing credit and supply chain risk

The information on credit and supply chain risk is overwhelmingly relationship-based. Instruments such as management accounts or accounts filed with Companies House are much more likely to be used to assess new customers — but quickly give way to more relationship-based controls as soon as working relationships have been established and are therefore used rarely by comparison.