Mid-market businesses know that the playing field is not equal when it comes to accessing working capital. The fastest growing of these enterprises, which are attempting to diversify their exports, simply don’t have the same options as larger organisations. Fortunately, opportunities are emerging to meet the trade finance and working capital objectives of these mid-market firms.
The most recent Visa Middle Market Growth Corporate Working Capital Index found that 77% of surveyed mid-market chief finance officers (CFOs) and treasurers cited costs as a prohibitive factor in accessing external working capital solutions, while 66% cited lengthy approval processes as the primary detriment.
Mid-market companies are typically defined as those earning between $50m and $1bn in annual revenue, though they share other common traits. We refer to these firms as ‘growth corporates’, owing to their dynamism and global growth achievements. Many of these businesses are attempting to better manage global supply chains, shortening lead times to meet increasingly digitised and demanding customer requirements.
Such companies have long been viewed as important growth engines for national economies around the world. However, these businesses often struggle to secure traditional trade finance solutions because they are too small for enterprise-scale, investment grade tools, yet too large for fintech platforms that service small and micro businesses.
These companies are often stuck in the so-called ‘trade finance gap’. The Visa Middle Market Growth Corporate Working Capital Index found that 13% of mid-market businesses in Central and Eastern Europe, Middle East and Africa (CEMEA) that needed working capital solutions did not use or were unable to obtain them. The same report revealed that only 19% of CEMEA businesses had no need for such solutions. This suggests that firms in the region with stable cashflows would benefit from better access or availability of financial tools to meet growth objectives.
Many growth corporates rely on technology-driven payment and financing solutions that bring together an interconnected ecosystem of global payments and working capital solutions. These companies are turning to innovative financing solutions, including high-value cross-border B2B payments, allowing transactions to happen in an efficient and secure manner. Next-gen solutions such as Visa B2B Connect enable them to access working capital, so they can more effectively manage supply chains and strategic growth initiatives amid an unpredictable global economic landscape.
Some growth corporates have found success by leveraging emerging working capital and payment solutions to create value for their businesses. In CEMEA, including the Middle East and North Africa (MENA), growth corporates in the agriculture, retail and marketplace sectors have been the most successful in achieving working capital efficiency. For example, 38% more growth corporates in the agriculture sector utilised working capital solutions for strategic growth purposes. Similarly, growth corporates in retail and marketplaces saw a boost of 26% in working capital solution usage.
Innovative companies commonly focus on three areas: trade and supply chain resilience; digital transformation; and sustainability.
As growth corporates look to expand their operations around the world, many are turning to technology-driven payment and financing solutions to support working capital objectives. A good example of this innovation is Visa’s suite of solutions, which include Visa B2B Connect and virtual cards.
Visa B2B Connect is an innovative multilateral payment network, offering an alternative cross-border solution that addresses the unpredictability associated with the current correspondent banking processes. These solutions allow growth corporates to transact efficiently, securely and transparently around the world, while enabling access to working capital and better management of supply chains and strategic growth initiatives.
Visa’s commercial focus on money movement solutions – to accounts, cards, wallets, and in-person disbursements – addresses challenges growth corporates face, including operating expenses, transaction times and lack of transparency in the payment process in some regions. As a result of these solutions, a regional exporter can use its bank’s channels, integrated with Visa’s assets, to send a payment to a supplier locally, in a neighbouring country, or across the world in near real-time.
As growth corporates, particularly in MENA, continue to look for global opportunities, innovative working capital solutions present an important tool for supporting those aspirations. Countries such as Saudi Arabia and the UAE have thriving economies that present fertile ground for enterprising businesses. They have the largest economies in the region, as both undergo rapid transformation to achieve economic diversification. In Saudi Arabia, GDP growth in 2025 is expected to be 6%, compared with 3.2% global growth, while the UAE’s economy is projected to grow 5% this year, with the non-oil economy accounting for 73% of GDP.
For mid-market companies looking to follow in the footsteps of growth corporates, deploying working capital solutions can be an instrumental strategy that will pay significant dividends.
Todd Fox is head of global policy at Visa; Vishal Virmani is head of treasury and working capital solutions, EMEA, at Visa; Piyush Tiwari is vice president of global treasury and working capital solutions at Visa; and Kati Suominen is founder and CEO of Nextrade Group
