The Future of SMB Financing in a Challenging Economy

Anthony Peculic, Head of BaaS & Cards, Cross River

November 21, 2023

1 min read

In a recent discussion with PYMNTS Intelligence, I delved into the necessity for Small to Medium-sized Businesses (SMBs) to embrace digital innovations in financing. 

Current economic conditions, with high interest rates, high inflation, and limited availability of funding sources create an extra challenging climate for SMBs. Financing tools typically cater to large corporate or consumer solutions, leaving SMBs lost in the middle. Now more than ever, SMBs must be creative in finding new funding solutions.  

In response to this challenge, digital innovations in SMB lending are emerging. The new tools include alternative credit scoring, predictive modeling, and real-time data analysis, which provide more flexible and accurate assessments of SMBs' creditworthiness and potential. Such tools are especially vital for SMBs without extensive credit histories, or for those in specialized sectors, where tailored, industry-specific solutions are more effective. Beyond providing capital, digital innovations also help SMBs manage their finances more effectively while cutting costs. 

What does all this mean? The future of small business funding involves a shift towards industry-specific solutions that will play a critical role in supporting the diverse SMB sector. The move towards digital financing solutions is essential for the survival and growth of SMBs and the broader economy. 

Watch Anthony’s full conversation with PYMNTS Intelligence here