MICRO, small and medium enterprises (MSMEs) can now convert their receivables into cash instead of stalling their operations as they wait for at least a month to monetize their invoices and post-dated checks.
Iloilo MSMEs learned of this access to financing opportunity in the recent business forum dubbed “Excelerate” held at the Iloilo Convention Center, Iloilo City, and was hosted by the Philippine Chamber of Commerce and Industry – Iloilo (PCCII) & Acudeen Technologies, Inc. (Acudeen).
“The main problem of MSMEs is they have the potential to grow but they have no access to financing or capital. However, they have many underutilized assets, like receivables,” said Mario “Magellan” Fetalino III, Acudeen chief executive officer (CEO).
With banks accepting real estate and car assets as loan collaterals only, Fetalino said MSMEs are most of the time faced with a problem of how to meet their financial obligations while waiting for the maturity of invoices or post-dated checks, which takes about 60 to 90 days.
“Some resort to unsecured loans, or the so-called ‘5-6’ wherein loan interests are 7-15 percent per month and 20 percent per month, respectively,” Fetalino said.
“If you are the business and this is what you pay yearly, it’s like you work to pay your debts and not really to earn,” he said.
Acudeen bridged this gap, and MSMEs can now use their receivables as capital.
“With Acudeen, you can sell your receivables to us,” said Fetalino, “we will collect from your client.”
Fetalino underscored the importance of cash on hand in a business operation. “How can you pay your obligations – salary, cash advances, if you don’t have money?”
He stressed that for an emerging economy like Iloilo, it is important that small business are not left behind in the course of development.
“MSMEs push the growth of our economy,” he added.
In Iloilo, Acudeen partnered with PCCII to make the financing opportunity available to MSMEs.
Dona Rose Ratilla, PCCII president, welcomes the partnership.
“Acudeen will convert your receivables to cash – you sell them your invoices and post-dated checks, and they will assist you with the cash, in advance. When MSMEs have the cash, they can use it as additional capital, they can scale out or buy equipment to enhance their produce,” Ratilla said.
For Ratilla, access to cash and ability to manage finances well are important for any business, much more for MSMEs, to survive.
“Financial management is every important for MSMEs to continue their businesses, and they should know how to manage their receivables being the lifeblood of our business,” she said.
With PCCII, she said it is the group’s advocacy to “help our small brothers so they can sustain their businesses and continue become partners of big businesses.”
Meanwhile, Fetalino said the firm supports the call for the passage of the Personal Property Secured Act or Senate Bill No. 1459 to further improve MSMEs accessibility to financing and capital.
“If it is passed into law, receivables and even personal property can be accepted as bank loan collateral,” Fetalino said.