Anyone who has ever tried to raise fresh capital at short notice as a small or medium-sized enterprise (SME) knows the feeling: forms, waiting periods, endless follow-up questions – and sometimes, in the end, a rejection. A recent study by the Lucerne University of Applied Sciences on the Swiss SME financing ecosystem shows that this feeling is not an isolated case, but a structural issue. At the same time, there is a lot of movement in the market right now – with exciting opportunities for companies that take a closer look.
A market in transition
The study makes it clear: the financing ecosystem around SMEs is changing. On the one hand, there are signs of consolidation and stabilisation – the market is maturing, and some providers are disappearing or merging. On the other hand, specialisation and digital transformation are creating new growth. So this is not a phase of standstill, but a phase of reorganisation.
Two observations underlie this change. First, there is a genuine financing need among SMEs that goes beyond what traditional banks offer. Many companies today finance themselves through a mix of their own funds, bank loans and alternative sources, as the traditional credit offering of banks often only partially covers the need for fast, uncomplicated and cost-effective solutions. Quite a few companies even refrain from applying for a loan altogether because the process seems too cumbersome.
Second, technological developments are driving the change. Artificial intelligence, cloud solutions and standardised interfaces (APIs) are transforming how financing processes work. What used to involve a lot of manual work can increasingly be automated – saving time, reducing costs and making financing solutions accessible to more companies.
Liquidity management and lending are converging
A central idea of the study: liquidity management and loan applications were long two separate worlds. On the one hand, SMEs deal with securing their liquidity, avoiding shortfalls and keeping an eye on cash flow in their day-to-day business. On the other hand – usually only when a shortfall is looming – comes the tedious search for a suitable loan.
It is precisely this separation that is beginning to dissolve. The technical term for this is "embedded finance" or "embedded lending": financing options are integrated directly where companies already manage their business processes – for example, in their accounting software or ERP system. If a potential liquidity shortfall is detected, a suitable financing solution can in future be displayed directly and obtained easily when needed, without a separate, time-consuming application process. This is a tangible improvement over today's process, which for many SMEs still involves forms, document uploads and long waits.
A diverse ecosystem of players
In recent years, a whole ecosystem of new players has formed around traditional banks: platforms for crowdlending and peer-to-peer loans, comparison portals, and providers that connect credit processes, data and access to capital. These players complement the traditional banking offering and open up additional, often faster and simpler ways for SMEs to access capital. The goal is not to replace banks: rather, new forms of cooperation are emerging in which banks sometimes act as capital providers in the background, while specialised platforms handle customer proximity and the digital process. It is therefore worthwhile for companies to look beyond their own house bank.
Keeping an eye on regulatory developments
There is also a lot happening at the regulatory level that could become relevant for SMEs in the medium term. Topics such as open finance, where financial data can be exchanged between providers in a standardised and secure way, or instant payments – real-time payments around the clock – are in the focus of the authorities. At the same time, digitalisation is raising the requirements for data protection as well as for combating money laundering and fraud. Even if these developments sound abstract at first, it is worth keeping them in mind in your own strategic planning.
What does this mean for your company in concrete terms?
Even though much of this happens behind the scenes, the study offers some practical food for thought for SMEs:
- Broaden your horizon: Get to know alternative financing options beyond the traditional bank and consider them when needed.
- See digitalisation as an opportunity: Those who digitalise their own financial processes early on – such as accounting and liquidity planning – are most likely to benefit from new, integrated financing solutions.
- Stay on the ball: New providers, partnerships and regulatory frameworks will create further, simpler options in the foreseeable future.
The Swiss SME financing ecosystem is undergoing an exciting transformation. Technological innovation, new market players and regulatory decisions are jointly ensuring that financing could become faster, simpler and more integrated into everyday business in the future than it is today. For SMEs, it pays to actively follow this development – because those who know the new possibilities early can also be the first to use them.