SMBs are actively seeking financing in Mexico since they have always needed to have access to sufficient resources to avoid economic hardships, maintain their growth, and properly develop their goods or services.

According to the findings of the Evolución del Financiamiento a las Empresas, 34.9% of businesses used commercial bank credit from April to June 2022.  The statistics also show that 1.7% of businesses were rejected for financial assistance.

This highlights the value of having credit while also highlighting the issue with the rejection that many businesses face when applying for financing. This rejection results from a number of factors that are crucial to understand.


The challenges SMBs have in finding financing sources

Many SMEs in Mexico face a significant challenge as a result of being rejected loans; others may even face extinction. The causes may vary, but they all involve some element of risk, which financial institutions actively try to avoid.


Recognize the dangers

Many Mexican SMEs find it challenging to obtain a loan for the following reasons:



In their capacity as sources of funding for SMBs, credit institutions focus on the credit incidences that potential providers have experienced, which has to do with credit history.

Even if there are no such debts at the time of the request, but they do appear in the history to have existed in the past, it is simple to refuse to grant financing if it is established that the companies seeking the funding have past-due obligations.


Insufficient ability to pay

If the requesting company has no debts, but its profits are small and its cash flow is not very large, this is interpreted by financial institutions as a null ability to pay, therefore, as a risk that the debt cannot be paid. Debt falls into the aforementioned delinquency problem.


High levels of debt

Even if the potential borrower is current on his payments, having another asset, i.e., being in the process of paying financing, at the time of loan application is a sign that there is a chance that the total debt will exceed the available business finances.


That the company is new

Since finance institutions are not always prepared to trust a project where there is doubt as to whether it will work or not, more recent Mexican SMBs have more difficulty acquiring financing.


Pymes Capital, the financing option for SMBs in Mexico

People with businesses who require funding but are worried that they won’t be approved for regular credit might think about Pymes Capital’s cash advances as an option.

This ground-breaking method of funding in Mexico is targeted at smaller projects who want to expand without spiraling into debt. It entails moving funds to a SMB quickly and easily in exchange for a portion of the sales it generates without having to adhere to a strict deadline.

It is a form of funding that has simple conditions that are easy to meet, requires no paperwork, and provides a response in a hurry. Consider using SMEs Capital for your firm, and watch it expand.