Cash is King

The majority of our customers is Small and Medium-sized Enterprises.

Over the past few years, I have watched a development in the SME industry, particularly in Denmark, which somewhat worries me: less companies are starting up, more and more companies are shutting down their businesses – and the ones that are left are becoming less active.

I meet a lot of companies who only confirm what we read in the newspapers: that many banks refuse to raise, extend or even just maintain the company’s overdraft – despite the company’s growth, profit and commitment.

Why are we worried?

Obviously because the victims here are our customers, so even though e-conomic as a company is still growing steadily, this situation is indeed harmful to our customers.

But on a larger scale, I believe that investing in IT and biotech companies is an important investment in the future – even though these companies may not be able to provide physical stock or production as such as security as many banks require.

As the CEO of e-conomic, Chairman of the Board in several societies and as a speaker on several occasions, I have met many potential growth companies, who have been met with a big fat NO by their banks, and this worries me.

Therefore, I have shared my opinion on two public occasions recently, i.e. on the Annual Meeting in the Danish state investment fond Vækstfonden and most recently as a Commentary in the Danish newspaper Børsen (in Danish).

If your story as an SME either proves or disproves my comprehension, please share your comment on this blog.

This entry was posted on 23 August 2010 at 4:52 pm and is filed under Miscellaneous. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.