Global modern card issuing platform Marqeta has revealed the challenges for BNPL use on multiple SMBs across Europe through the publishing of its new survey. According to the `Small business financing done differently’ research, the high levels of inflation seen in the last couple of years are currently affecting small and medium businesses around the continent while allowing them to create an opportunity to reinvent how to access working capital.

The publishing consists of interviews with numerous SMEs and SMBs, and it focused on looking for the opportunities, problems, and challenges for Buy Now, Pay Later use by enterprises and companies as a way to get access to capital in an easier and safer way, without the increase of debt risk. All of the respondents were employed full-time in their company and had purchasing responsibilities, as well as being engaged at the manager or director level (three-quarters). Moreover, 80% of them worked in businesses that employed 500 people or fewer while having annual revenue of up to GBP 99 million (typically their turnover was between GBP 1 million and GBP 19 million).

Details of the survey It was shown that over half of the surveyed SMBs have between GBP 10,000 and GBP 75,000 owned to them by clients monthly, with 36% of the businesses mentioning that they need these specific funds to remain solvent. Company leaders are spending valuable resources, funds, and time from their core business duties to prioritise the critical finance-related admin (almost 75% of them stated that they are reliant on handling invoicing in-house either by themselves or through the use of an internal accountant). More than half of the interviewed companies said they are being paid by those customers in 30 days, with a further one-third choosing to wait 60 days, and the remaining 14% offering users the possibility to make the payment in 90 days or more.

Furthermore, the survey found out that only in the UK there is a sum of GBP 23 billion owned to companies in late payments of customers. This highlights the difference and influences these funds can have on the SMBs development process in the economy, as well as in whether a small company has a chance to grow or not. The research also showed that monies-owned invoices currently affect and prevent small companies from developing.

Over 22% of the interviewed businesses stated that they would use the funds to expand their physical or online footprint, 28% to undertake more marketing activities, and 20% to spend more with suppliers. Other strategy steps include recruiting more staff members or modernising and updating their technology. While liquidity represents a concern for multiple businesses across the globe, BNPL services can offer companies short-term loans in order to provide a more seamless and efficient cash flow, as well as to support innovation, and enable expansion through the purchasing of products and solutions without the need of a commitment to full payment upfront.

Of the surveyed enterprises, 43% of leaders claimed to have used BNPL in the last three months, and 43% claimed to be unaware of this option. This represents a very common barrier to BNPL take-up, since 25% of the respondents stated that they believed BNPL was not made for a business like theirs, and 25% found it too risky to try. The survey was released a couple of weeks after Marqeta's partnerships with WorkWhile and Stables.

The company was selected by WorkWhile to power accelerated wage access to its workers through the use of a debit card. Its collaboration with Stables enabled customers to spend, send, and earn stablecoins for powering its Mastercard prepaid cards. .