Missing Middle Conundrum Before, During and After COVID-19

Covid-19 has put small businesses around the world in a critical situation. This article will tell you about the missing middle conundrum and help you with merchant funding.

Missing Middle Conundrum

Small and medium-sized businesses account for 95% of registered firms globally. Over 50% of jobs belong to them. When it comes to business banking customers, they’re categorized into the following groups: micro enterprises, small and medium enterprises, and corporate. Each of them has specific characteristics, as well as different credit requirements and sources.

Even though many policy measures and initiatives have been set up during the past years, the segment is still unstable. This middle segment in the commercial borrower continuum lacks proper organized credit flow, structured credit information, and robust institutional infrastructure.

The missing middle conundrum is expected to still exist even after Covid-19.  However, each time the world economy is shaken by a major event, lots of changes appear in different sectors such as structure, policy, the way credit is assessed, product mix, and financial sources.

Economic Crisis: Merchant Funding

In the U.S., there’s no certainty about the future. 4 of America’s largest banks have put aside $30bn, in addition to the $20bn in Q1 for a bad-debt scenario. COVID-19 has already created huge problems for individuals, businesses, and nations. The economy is paralyzed: Q3 is anticipated to see a double-digit GDP dip worldwide.

Do you need to turn to a reliable business funding provider? To get fast and easy access to merchant funding, consider working with a respectable alternative online lender in your field. Make sure the offered rates are the cheapest possible in the space.

The overall profits have dropped by 50-70% YoY. Wells Fargo, which isn’t involved in large Wall Street operations to offset charges for dud loans, has lost for the 1st time since 2008.

So, there’s a credit gap. Credit requirements vs. credit supply is increasing disproportionately. The missing middle conundrum isn’t going to disappear at least for some time. Thankfully, with the right measures, it’s possible to make the situation better. When it comes to business funding, find a trustworthy provider offering the cheapest possible rates and fees to work with.

Author Bio: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners with their merchant funding solutions. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing business funding for hard working business owners across the country.