Using crypto for your SME
Running a Small and Medium Enterprise (SME) means you are not a millionaire. You are a regular citizen out to make the most of whatever's good in life. Thus, there is a good chance you are trying to rotate the little you have for maximum profit. Which in itself means your funds should be highly flexible, liquid and be in your control as much as possible. It could never get better with crypto.
In traditional commerce and financial systems, SMEs are at the receiving end of the brunt of bureaucracy that favors big businesses from all angles. Cryptocurrencies and their resultant Blockchain technology are set to be game changers in commerce. So what is in it for SMEs? Basically, crypto is the equalizer. With it, small businesses have the same privileges as their multinational counterparts. Here are a few ways you could use crypto for your SME.
Borderless, easy and convenient funding
According to the World Bank, SMEs significantly account for economic growth and job creation through the private sector but are highly disadvantaged in several areas, especially in funding. Up-to 50% of loans applied for by SMEs are rejected by banks. Not only is loan borrowing for small businesses staked with high odds of failure, the paper work and scrutiny involved usually are long and cumbersome.
As such, SMEs turn to alternative funding options. Sometimes, this involves unregulated lenders, among them shylocks who charge exorbitant interests. Such funding models are not only a burden, but also highly unsustainable.
With a BlockFi business loan, crypto holders can use their assets as collateral to borrow monies in fiat. This means they don't have to lose their crypto-holding to access funds. In essence, crypto holders with SMEs can run two investments at the same time using a single asset. A person holding $10,000 worth of Bitcoin for instance, can borrow $2,000 from BlockFi, while still eligible for any profits arising from any $10,000 Bitcoin price rise. This is also a great way of managing crypto taxes and securing tax breaks on crypto earnings.
Personal control of funds
Banks can hold user funds at will and sometimes, on whims. As a SME, you should be able to withdraw, deposit and make savings as seamlessly as possible without someone telling you no. But once you give your money to a bank, you give the bank more rights to the funds than yourself. Which can be both inconveniencing and frustrating. When using crypto on the other hand, transactions are mostly instant. Also, you have full control of the funds and can decide what to do with them at any time of choice. This affords SMEs a very high liquidity - essential for the survival of any business. We'd do always recommend using a crypto accounting professional to help manage funds securely and carry out the right tax return, companies such as Harvex provide specialist services in this area.
Easy record keeping through Blockchain
Blockchain is the technology that underpins crypto. It forms an immutable public ledger that records all transactions conducted through a given Blockchain. By conducting transactions through cryptocurrencies, SMEs have a reliable audit system as all the records entered on the Blockchain cannot be changed. The records can be used to manage daily transactions as well as used to settle disputes.
Low crypto fees
Cryptocurrency transaction fees are lower than general payment gateways, cue debit and credit cards. With the question of scalability being addressed on several Blockchains, transaction fees on crypto may go a lot lower. Given that SMEs try to save on every next cent, saving up on those transaction fees is one of the highly attractive aspect of crypto.
Brand creation
Let's face it, no matter the reason that a crypto attracts attention to itself, it always has a way of creating a buzz. Whenever a business starts accepting crypto as a means of payment, it makes headline news. Both crypto enthusiasts and skeptics start talking about it for their respective reasons. Eventually, the noise being made around the event grabs the attention of both crypto and fiat customers. For an SME, using crypto could mean the difference between stagnating and breaking the ceiling.
Elimination of fraud
As an SME, the sound of a cancelled payment is always a nightmare. Not only do you stand to lose revenue for the product, you are also fined in chargebacks. There are a good number of fraudsters who gladly take advantage of this loophole in credit card payments. Chargebacks are always non-negotiable and non-refundable. As such, even if a merchant does eventually contest the cancellation and receives the money owed, the chargeback fee still remains a liability.
Once crypto payments have been made, they are irreversible. Even better, the development of Smart Contracts ensures no party in a transaction takes advantage of another. Thus, crypto payments are an easy way for SMEs to protect themselves against fraud.