LONDON, Sept. 13, 2018 /PRNewswire/ -- It's often said that small and medium-sized enterprises are the backbone of the economy. When you stop to consider that the UK was home to 5.7 million SMEs last year -- representing around 99% of all businesses -- the saying starts feeling less like a platitude and more like it actually has legs.
Despite the sheer volume of SMEs, the vast majority ultimately die on the vine every year. In fact, the number of British businesses collapsing into bankruptcy hit a four-year high in 2017. The most common reason most small business fail to survive long enough to see their fifth birthday?
Poor cash flow, often due to unpaid customer invoices and the costs associated with pursuing them.
According to figures released by Bacs Payment Schemes, nearly a quarter of SMEs rely on borrowed cash to keep pace with business-essential overheads. And with a staggering £14.2 billion in late payments owed to SMEs by customers in 2017, it's an understatement at the least to say that for modern entrepreneurs, this is a problem of considerable proportions.
But poor cash flow isn't just a numbers problem. It's also becoming an increasingly frequent source of mental health issues for SME owners and freelancers -- with 52% of those surveyed attributing panic attacks, anxiety, and depression to poor cash flow.
On a mission to rewrite that narrative is Solna: a London-based fintech startup that launched at Finovate, a conference showcasing cutting edge fintech, in April. Solna is an intelligent invoicing tool, powered by credit score data, to help startups, micro-businesses, and freelancers put an end to late payments, get smart about cash flow, and ultimately thrive.
And, as Solna Co-Founder and CEO Inna Kaushan adds, it's also entirely free to use.
"Your average small business waits about 72 days for their invoices to clear, during which you're spending an inordinate amount of time chasing down payments, having awkward conversations, and putting important things on hold," says Kaushan. "We designed Solna to give businesses the power to stay on top of their cash flow, get paid more efficiently, and manage risk more effectively."
Solna is the first and only invoicing platform of its kind to leverage credit score data to provide users with a clearer picture of their customers' financial health. This means that users have valuable insight into risks by helping them recognise in advance if a specific client is likely to pay on time or default.
But this is more than just a fancy feature; it forms the core of what makes Solna so powerful. In the same way that ClearScore (acquired by Experian) gives consumers insight into their credit score and provides them with tailored financial services, Solna will offer financial services to SMEs looking for solutions to late payments. By tying in companies' credit scores to their invoicing behaviour, Solna will be able to propose late payment mitigation tools based on each individual user's specific needs while pre-approving them for financial services -- without needing to go through the standard application process.
One of the platform's biggest efficiency drivers is its ability to automate the overdue invoice-chasing process, saving users time and allowing them to focus on more important tasks. Solna also harnesses sophisticated algorithms to pre-approve users for working capital -- eliminating the application process and expediting funding.
But Solna isn't just for small business users.
Accounting professionals will also benefit by being able to propose a top tier invoicing tool to even their smallest clients, instead of relying on word or excel.
Behind the scenes, Solna's emphasis on building a team that celebrates diversity is instantly evident. With a lean staff hailing from 9 countries and 3 continents, as well as a predominantly woman-led core management team (Kaushan holds the distinction of being one of the few female CEOs in the London fintech scene), the startup's marked melting pot identity is treated as a badge of honour -- particularly given the larger dialogue on lack of inclusivity across the tech world.
"Bringing different perspectives to the table is good for creativity, it's good for problem solving, and it's good for innovation," says Kaushan. "This is the mindset we're building our brand around, and it helps inform our own efforts in creating a future where small businesses flourish. Because as we've seen, when small businesses flourish, so does the economy."
Solna is now available for UK-based SME users and will be available to users outside of the UK by the end of the year. Click here to learn more and to sign up for free.
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