Crowdfunding platform and professional CFOs join hands to support SMEs

By Digital News Asia March 7, 2018

Demand for part-time CFO services amongst Singapore SMEs is on the rise
Cashflow management has consistently surfaced as a notable challenge for SMEs

Crowdfunding platform and professional CFOs join hands to support SMEs

CHANNELLING S$300,000 (RM887,558) to a SME in need of funds this year marked the first effort in Funding Societies and the CFO Centre's partnership to address two major problems that small and medium enterprises commonly face - cashflow constraints and financial management.

The CFO Centre offers on-demand financial consultancy services to SMEs by seasoned chief financial officers (CFOs), while Funding Societies addresses their capital constraints through crowdfunding of business loans.

The collaboration will work towards improving accounting, working capital management and thereby growth prospects for small businesses who lack such resources.

According to a joint study by SPRING and PwC Singapore, cashflow management has consistently surfaced as a notable challenge for SMEs.

Yet effective working capital and cashflow management are crucial to the survival and growth of any business. Without running or sustainable cashflow, a company cannot maintain operations or invest in business development.

Funding Societies co-founder and CEO Kelvin Teo (pic), said, "We believe in serving SMEs. Our partnership with the CFO Centre creates a more holistic financial support system for underserved SMEs. The professional financial guidance that SMEs can get from the CFO Centre increases their ability to not only secure financing, but also repay and grow with Funding Societies."

The demand for part-time CFO services amongst Singapore SMEs is also on the rise. The CFO Centre reported a revenue growth of close to 30 times from 2013 to 2016.

The CFO Centre's part-time CFOs advise SMEs on best financial management practices, from fixing cash flow issues to establishing an efficient accounting process.

Steve Settle, regional director - Asia at the CFO Centre, said, "The CFO Centre is a global network of seasoned CFOs offering their extensive experience to help small and mid-size businesses grow profitably and scale up in a sustainable manner. Their work is undertaken as required, with no fixed term contracts (minimising commitment and exposure), enabling clients access to a valuable resource at a fraction of the cost of a full time CFO. One of the common themes we found in SMEs is poor cashflow management.

“Clients have the knowledge and the desire to grow but lack funding. Through this partnership with Funding Societies, we have added more value for our clients by being able to direct those who need financing to a source of SME financing."

Funding Societies provides business financing to underserved SMEs for their working capital and expansion needs. Its digital financing platform facilitates SME lending from retail and institutional investors.

SMEs can apply for loans ranging from S$5,000 to S$1.5 million through a simple online process with fast approval. Many of Funding Societies' funded SMEs do not receive sufficient support from traditional financing options.

In the inaugural Asean SME Transformation Survey prepared by Ernst & Young, United Overseas Bank and Dun & Bradstreet, 37% of SMEs surveyed want deeper engagement with their financial services providers, and 58% want to be referred for alternative financing.