SMEs1.jpgToo little information and awareness is sabotaging small- and medium-sized enterprises (SMEs) which makes it a challenge to receive credit, getting better deals from suppliers, and securing additional funding to help grow their business, says credit advisor Experian SA.

“SMEs needed to be aware of what affected their credit profile negatively and positively, and to make a habit of checking their credit profile regularly to ensure that it accurately reflects their circumstances”, said Michelle Beetar, Experian SA MD.

Most SMEs need capital in order to grow, so it is crucial that they obtain as much information and knowledge they can regarding funding and understanding of their business credit profiles, which can at times work against them if not implemented correctly. Experian SA has partnered with the National Small Business Chamber to host sequences of credit wellness workshops around the country.

“The objective of hosting a national road show of credit wellness workshops was to educate, encourage and assist SMEs to become credit worthy and maintain a high level of creditworthiness”, added Beetar

A business credit profile forms a key part of the decision making process for lenders and service providers. Having a good credit profile can help open up exciting opportunities for SMEs.

"Whether a small business is applying for finance with a lender, credit with another business, competing for a supplier contract or simply trying to get a good deal on their business mobile contract, they need to understand that their business credit profile will play a role. That is why it is vital that they understand what their credit profile is saying about their business and how these suppliers, clients and lenders view their business. Equally important is for SMEs to protect their revenue flow by managing their credit risk and understanding who they are dealing with," Ms Beetar said.

She said managing cash flow and debt is often a challenge for small businesses, with late payment cited as one of the biggest causes of this.

Michelle Beetar advised businesses to monitor their customers on an on-going basis so that they can take appropriate steps if circumstances change.

Artricle adapted from Business Day