Private Equity (PE) investment in SMEs took a sharp dip by almost 68% at US$ US$ 580 million in calendar 2009. It made it difficult for small firms to seek safe financial support for executing their growth plans, reveals a Paper on Private Equity on Small and Medium Enterprises (SMEs).

The total number of PE deals signed by SMEs in 2009 stood at 81, while in 2008, it was 187, highlighting a sharp decline.  The fall in PE investments have largely been credit to slowdown, says Mr. D S Rawat, Secretary General ASSOCHAM while releasing findings of the Paper here today.

The report states that in year 2009 was a hard-hitting year for SMEs in India as they not only had to face losses, but also encountered difficulties in accessing adequate equity capital from investors.

The meltdown made PE investors wary of investing in small businesses as there is a great deal of risk involved when it comes to funding cash-strapped companies. Poor returns on investments in the midst of challenging times have forced fund managers to think twice when it comes to putting too much into the sector, added  Mr. Rawat.

Overall, PE deals in India during 2009 numbered 287 amounting to $4.43 billion as against 502 amounting to $ 11.9 billion in 2008. The total value and volume of PE deals reduced by 50% and 40% respectively as compared to 2008.

In the year 2009, 650 Private Equity and M&A deals with a total announced value of $ 26.98 billion compared to 948 deals worth $52.33 billion in the year 2008 and 858 deals.

Tags: adequate equity capita, PE investments, PE investors, Private Equity, returns on investments, small and medium enterprises, small firms
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The labour-intensive micro, small and medium enterprises (MSME) sector is becoming more efficient in terms of production versus persons employed.

According to the Annual Report 2009-10 released by the Ministry of MSMEs, the percentage rise in production in 2008-09 compared with the previous fiscal is double the percentage rise in the number of persons employed.

In 2008-09, production in the MSME sector went up 11.4 per cent to Rs 8,80,805 crore, while the number of persons employed rose 5.2 per cent to 659.35 lakhs. In the same fiscal 12.37 lakh new enterprises were added to the sector.

In terms of value, the sector accounts for 45 per cent of the manufacturing output and 40 per cent of the exports of the country. The sector manufactures over 6,000 products, ranging from traditional to high-tech items.

Tags: labour-intensive, manufactures, previous fiscal, small and medium enterprises
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Business financing for small and medium enterprises ( SMEs) requires out of box thinking and analyzing the key assets of the SMEs which can be leveraged to raise the financing . SMEs have to be pragmatic about growing their business, but they also need money, when the opportunity knocks. One possibility, which will take control of their growth through a process of trade financing, which the auction to allow their claims.

Here’s how it works:

1. Apply online – Online credit marketplaces like Biz2Credit allow the SMEs to apply online and get matched to relevnat lenders as well as provide case manager support for free. Small and medium-scale entrepreneurs can fill in about 15 minutes. Once the application and financial documentation are received, the match maked lenders contact the SME borrowers.

3. Select invoices – now the seller is willing to get the A/R financing against and these should be less than 90 days outstanding

5. Sales transaction takes place – There are two ways this can happen. When the auction ends, the buyer with the highest bid which meets the parameters of the sellerwins the auction. The other possibility is that the seller can set a buyout price. “This is like” Buy It Now “option on eBay. If a buyer agrees to price” buyout “of the auction is closed immediately and give buyers.

6. Obtain commercial financing quickly – if the sale goes, the funds electronically deposited into an account for the seller. This happens within 24 hours after the auction closed.

As a rule, is about 60% of a small business’ working capital sitting dormant in the form of invoices. SMEs can put these assets as they make this money work nowrather than later. By controlling the A/R financing , owners of small and medium businesses can about the fate of their businesses with little risk, some limitations and total control. Opportunities will not wait.

Tags: analyzing, capital, financial documentation, Opportunities, opportunity knocks., small and medium enterprises, their growth
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Public sector Indian Bank has launched Visa Business Card for corporates and small and medium enterprises. The Visa Business Cards will carry all the benefits associated with global cards, including insurance benefits free of cost and are priced competitively.

The cards offer an interest free period of a maximum of 45 days and revolving credit on payment of minimum amount of 10 percent of the outstanding. The Chennai-headquartered bank also launched ATM Cards for its sponsored Regional Rural Banks (RRBs) for the benefit of the rural customers.

Tags: cards offer, payment of minimum amoun, Public sector Indian Bank, Regional Rural Banks, small and medium enterprises
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Small and medium enterprises in various sectors are moving towards a new model of information technology to gain a competitive edge in the market.

Deploying software-as-a-service (SaaS), software hosted over the Internet and leased out as a subscription, avoids the upfront costs of on-premise software and server infrastructure needed to host the solutions. Minimizing operational and capital expenditure, SaaS gives business owners the flexibility to scale up the business while scaling down the investment.

Tags: small and medium enterprises, software-as-a-service (SaaS)
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