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Challenges in SME Access to Capital
Report

Challenges in SME Access to Capital

Richard Swart
NZZ, 2015
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Editorial Rating

7

Qualities

  • Innovative

Recommendation

In the United States, small and medium-sized enterprises (SMEs) often lack capital, and that poses a threat to American entrepreneurialism, according to crowdfunding expert Richard Swart. He outlines the challenges that start-ups and young companies face in obtaining financial support, and he describes some of the novel sources of credit and investment that technology has made possible, while highlighting their drawbacks as well. getAbstract recommends this SME financing primer to budding entrepreneurs and small-business investors.

Take-Aways

  • The rate of new business formation in the United States has been declining for more than a decade, largely due to a lack of access to finance for small and medium-sized enterprises (SMEs).
  • Many SME owners aren’t financially literate, and a growing risk aversion and the mounting costs of regulatory compliance are also dampening entrepreneurship.
  • However, technology has created novel avenues for SME lending. Loan processing is faster and more efficient, and a business’s web metrics can help an online lender qualify and monitor a borrower in real time.

About the Author

Richard Swart is a research scholar at the University of California Berkeley and an adviser to the Bill and Melinda Gates Foundation.

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