Small business owners struggle in managing business finances, finding appropriate sources of funds, and
making proper business investments. In this case, a financial advisor can always help the small business
to make the best financing decisions. A financial advisor is a professional with vast knowledge, skills, and
experience in business financing who helps small businesses to optimize business capital, find the cheapest
funding sources, make the best use of their finances and invest the profits for business growth.
We can define a financing company as a specialized institution that grants loans and funds to businesses and
helps them with cash flow issues.
So as an SME, why do you need to have a financial advisor? Some benefits are mentioned below:
The financial advisor has specialized skills and knowledge on financing sources, processes, and management.
Mostly the small business owners lack knowledge about the capital market and financing system. Thus, the
financial advisor can help to ensure sufficient cash flow in the business and efficient use of the capital.
2. Greater resource:
Small businesses lack sufficient resources needed for financing and investment management. However,
financial advisors have the resources needed for finding the appropriate financing sources such as market
data, data analysis tools, and data management systems.
3. Better financing decision:
Financing is one of the critical decisions of any business. The financial advisor has deep knowledge and
experience in the finance market. Thus, a financial advisor can find the best available financing sources for
SMEs. The financial advisor can help the business owner properly handle financial matters such as loans and
profits and reduce business expenses.
4. Investment decision-making:
Small businesses struggle with developing business growth plans and investment strategies. The financial
advisors assess the risks factors, investment goals, business profitability and thus, make the best investment
decisions for the small business to invest their money for further growth.
5. Cost-saving and optimized profitability:
The financial advisors provide expert help in managing business finances and help in developing internal
accounting and monitoring systems. This way, the small business can reduce its financing costs and operating
expenses which increases business profitability.
Some finance companies might play the roles of financial advisors and help small businesses to manage
business financing and investing activities. A financing company can be the advisor of small business
companies in different ways. A few examples are discussed below:
1. Financial asset management:
Small business owners keep busy with sales and marketing and lose sight of business asset management. The
finance company can help small business owners efficiently allocate the business assets and achieve business growth and long-term financial goals.
2. Insurance planning:
Even for small businesses, insurance against property loss is an important part of the business. Without
insurance, the business may lose high-value raw material, finished goods, equipment and face traumatic
events of employee health damage. In this case, the finance company. In this case, the financing company can
help small businesses assess risks and buy insurance for life, disability, products, and properties to protect their financial assets.
3. Planning business finances:
Due to a lack of skills, time, and resources, it is hard for small business owners to manage business finances
effectively. In this case, a financing company can work as a financial advisor and ensure proper business
bookkeeping and preparation of financial statements to manage business finances. The finance company can
help the business owner to prepare a business financing plan determining the amount of debt, profit rate,
payment period, and repayment method. SMEs face a lack of stable cash flow in the business to cover
business expenses and obligations. In this case, a financing company can help the business owner to find
sources of funds quickly. For example, the small business might require urgent cash inflow to cover business
operation expenses. In this case, the financing company can advise to use invoice finance and help the small
business owner to free up immediate cash from outstanding invoices through invoice financing services.
Lendo is a financing company that helps SMEs convert pending accounts receivables to cash right away. Lendo is the first financial institution to introduce a peer-to-peer (P2P) invoice financing platform in Saudi Arabia starting from 0.8 per month for small and medium-sized enterprises (SMEs). Small business owners can ask Lendo for financing advice and get expert suggestions on how to improve their financial position, optimize profits and strengthen financial condition. For more information about Lendo and its services, visit the website here.