Financial challenges of growth for small and medium sized enterprises


Growth is demanding of financial resources, deriving many from the liquidity problems faced by companies during this stage, from the inappropriate structuring of the financing of investments in assets and working capital, from the size of the debt contracted and/or the lack of match between the currency or currency of the debt and the income generated. or the inadequate management of inventory and the collection portfolio, which forces a greater amount of resources to be tied up in working capital.

In this regard, while debt contributes to accelerating this growth, those responsible for financial management in smaller companies often do not notice that:

  • Debt adds financial risk to the operational risk of the business, and should not be taken for assets or lines of business that do not generate value.
  • The objective of debt is to leverage shareholder profitability, without jeopardizing solvency and maintaining the company's financial fluidity and balance.
  • The size of the debt or its inadequate profiling often forces its refinancing, increasing the credit risk of the debtor and, therefore, its cost.
  • The effective and efficient management of working capital is essential to optimize the investment and the size of the debt taken for its financing.

And in this purpose of growth, many companies do not validate with due periodicity the validity of their business model, and if the key success factors of the past continue to be valued by their customers; changes that may require additional investments and the reorientation of the strategy and financial management, whose monitoring and control must be based on the identification of key economic and financial performance indicators (KPIs), to ensure the successful execution of the strategy and its business plans.

How can HLB Peru help?

If your organization needs to finance investment projects, reprofile or restructure debt, or a financial management service, we put at your disposal a staff of professionals with recognized trajectory as managers or financial directors of smaller companies and corporates, in various economic sectors.

HLB PERU embraces its clients' search for sustainability and growth, and, with personalized attention, we take the time to get to know their financial needs in depth and provide them with solutions that enhance their profitability and financial solvency.

Our consulting division is ready to assist you, please contact us here

Jonny Mayandía

Associate Consultant at HLB PERU

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