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SME owners need a year’s financial buffer to feel safe: despite existing debts

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With interest rates expected to rise during 2018, over four in 10 admit to having no such backup and average monthly debts of £3.6k   

Nearly a third (28%) of small business owners don’t feel financially confident unless they have a buffer big enough to cover running costs for a year, according to new research* from merchant services provider Paymentsense (https://www.paymentsense.co.uk). The study found that despite this, more than four in 10 small business owners (41%) admit to having no such buffer in place, meaning as many as 2.3m UK small businesses may have no financial backup plan.

This ‘financial confidence gap’ between what business owners need to feel secure, and what they actually have, comes after the British Business Bank published a report revealing that small business confidence and demand for finance are declining.

The government-owned development agency found the proportion of businesses confident of loan approval fell recently from 58% to 43%. The report also highlighted that lending was flat to small businesses in 2017.** These findings arrive at a time of uncertainty over European trade negotiation outcomes, and reports of an expected medium-term interest rate increase.

For those businesses that do have something in reserve, Paymentsense found that the most popular backup is cash savings – held by nearly six in 10 (59%) of prepared businesses. A third (34%) said their buffer included property and nearly a quarter listed an overdraft (23%). Plant and machinery featured for a fifth (20%), with 17% using business credit cards.

Michael Foote, who founded UK price comparison site Quote Goat (https://www.quotegoat.com) in 2015, said: “As a small business owner, feeling financially secure has always been one of my top priorities. For me, this means ensuring I have a cash buffer that covers company costs for at least half a year, to safeguard against potential cash flow problems.

“Initially it was difficult to build and meant taking the bare minimum out of the business whilst it grew. However, it’s let me focus my efforts elsewhere in the business, enabling Quote Goat to successfully compete against larger competitors in the industry.”

The Paymentsense study also found that almost two thirds (61%) of SME owners are in debt, with monthly repayments averaging almost £3,600 (£3,589). What’s more, over half (55%) admit to deliberately paying suppliers and partners late to ease cash flow problems. More than a fifth (21%) said they do this at least once a month.

Guy Moreve, head of marketing at Paymentsense, comments: “We know that feeling financially confident is critical for small business owners. Aside from helping you sleep at night, it enables accurate long-term fiscal planning for growth rather than just survival. Having a buffer is just part of the picture. Cash flow monitoring and proactive credit control are also essential. However, we’d caution against routinely delaying invoices to partners and suppliers, as it risks damaging important business relationships.

Working with over 60,000 small businesses across the UK, we understand their financial anxieties. Despite recent drops in the rate of inflation, a future increase may lead consumers to become more cautious with their purchases, and would make existing business loans more expensive to manage for SMEs. With this in mind, having a buffer makes great business sense. Actively setting aside a little each month will help balance slower trading periods, and unforeseen expenses. Even something as simple as a weekly cash flow report can provide insights that will enable you avoid future problems.”

The most popular financial buffer

 

Cash Savings 59%
Property 34%
Overdraft 23%
Plant / machinery / equipment 20%
Business Credit Cards 17%
Asset-based lending / factoring/ invoice finance 16%
Bank Loans 14%
Stocks and investments 13%
Help from family and friends 8%
Government funding scheme 8%

 

* Commissioned research took place in January 2018 amongst a nationally representative sample of 504 small business owners.

**Comparing the three months to August 2017 with the three months to November 2017. https://www.ft.com/content/9c5b9b56-1599-11e8-9e9c-25c814761640

Reference for inflation levels:

http://uk.businessinsider.com/uk-inflation-rate-in-february-brexit-2018-3

British Business Bank: Small Business Finance Markets Report 2018

https://www.british-business-bank.co.uk/research/small-business-finance-markets-report-2018/

For more information please contact:

Liz Naven / Ben Crispin

Fugu PR 

T: 01273 327 514 

liz@fugupr.com / ben@fugupr.com

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Press Releases

Liechtenstein Financial Market Authority Approves State-of-the-Art Tokenized Real Estate Investment Product

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Liechtenstein Financial Market
CROWDLITOKEN AG pioneers and starts distribution of a digital bond – European retail investors benefit as well For the first time in Europe, the Liechtenstein Financial Market Authority (FMA) has approved the offering prospectus for a tokenised real estate investment product. CROWDLITOKEN AG is thus a pioneer for new financial innovations. The Security Token Offering (STO) is now running in European countries. By using blockchain technology, qualified and retail investors are enabled to invest in first-class real estate in Europe. Also the Swiss Financial Market Supervisory Authority (FINMA) has confirmed that no special regulatory approval is needed to market this new class of digital assets in Switzerland. The company CROWDLITOKEN AG, based in Triesen/Liechtenstein, is launching a security token that combines the advantages of direct and indirect real estate investments. CEO Domenic Kurt comments: “This represents an evolution in the world of financial products. New technologies are enabling us to launch a first-class product that not only offers new investment opportunities, but also remedies inefficiencies, cuts costs and safeguards transparency.” In concrete terms, the product is a digital representation of a subordinated bond, whereby both the bond as well as the underlying real estate is digitised via blockchain. The token – named the “CRT” – replicates the income streams and the value changes of the real estate properties. Holders of the tokens can select their properties to invest in and thereby tailor their own portfolio. They will benefit from an attractive yield of 5–7% p.a. The ability to invest small amounts in selected European real estate, the easy tradability on digital stock exchanges (in preparation) and the investment flexibility are key innovative features of this unique real estate investment product. The STO is divided into several phases. The private sale for the first 10 million tokens, which is open to all types of investors, is currently underway with a discount of 25% (equivalent to CHF 0.75 per token, 1 CRT = CHF 1.00). This is followed by the pre-public sale (20%) and public sale (10%). The minimum investment in all these phases is 100 CHF each. CROWDLITOKEN AG targets to raise 100 million tokens through the STO, the funds will be used to build up the real estate portfolio. CROWDLITOKEN’s clear goal is to bring real estate investments into the digital era by using blockchain technology and thus democratise access to the market. For more information, please visit crowdlitoken.com. About CROWDLITOKEN AG CROWDLITOKEN AG is a Liechtenstein-based start-up that provides investors with access to European core real estate via blockchain technology. This is based on real estate-linked security tokens – termed “CRTs” – i.e. a digital representation of a bond that returns a yield equating to 5–7% p.a. CRTs are fully compliant and combine the advantages of direct and indirect real estate investments.
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Globitex Exchange Leads Charge in Trading by Lowering and Removing Fees

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Globitex Exchange

As part of its new strategy to become the most widely used cryptocurrency exchange, Globitex is lowering and removing fees for certain account features. Globitex aims to make it’s products more accessible for retail and corporate customers. The EURO Wallet continues to excel as the best solution for sending and receiving EUR payments from inside of an exchange. The EURO Wallet is powered by Nexpay UAB, an EU licensed financial institution and gives users full control of their assets.

“We implement changes quickly around feedback we gather from both retail and corporate customers. We never compromise on security, we abide by every regulation to ensure customers get the most of what is possible with cryptocurrencies today.” - Uldis Teraudkalns CEO of Globitex Exchange.

Private Individuals will enjoy the removal of the monthly account maintenance fee, this allows Globitex clients to open and maintain a EURO Wallet account without cost or liability until it is actually used for transactions.

Corporate customers will enjoy the reduced net cost on larger transactions, making the service more attractive for the largest corporate clients and traders. The combination of the service offering and pricing makes Globitex the No.1 cross crypto-fiat trading and financial operations platform. Globitex aims to add the functionality of using GBX tokens to pay for EURO Wallet fees with discounts, which will substantially increase the utility of the GBX token in the upcoming weeks.

Globitex encourages all traders, investors, and corporates potentially seeking to make payments from within and outside of the crypto space to use the exchange, confident it will be their permanent solution of choice. Users seeking to bridge the traditional finance sector with their cryptocurrency assets are urged to visit Globitex to Utilize their own IBAN account within a cryptocurrency exchange.

For more information or inquiries, please contact Globitex Support (support@globitex.com).

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Tech Giants Opt for Ethereum: Why ETH is Still Behind BTC

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There’s been huge news for Ethereum recently. Some of the world’s biggest tech companies and most famous technology entrepreneurs have shown their support for the blockchain platform. This is in addition to the many large companies that have already been supporting Ethereum for years. But, despite all this, Ether (ETH) is still lagging behind Bitcoin (BTC) in all the ways that matter: price, transaction volume, and market capitalization. Why is Ethereum still struggling to keep pace with Bitcoin so many years down the track? Let’s take a look at how Ethereum has been adopted in recent months, and how this is affecting the price of ETH.

Amazon Shows Support For Ethereum With a New Managed Blockchain Service

Amazon has recently made shockwaves across the blockchain industry, when they announced their managed blockchain services in an exciting press release. They say the service will allow users to set up and manage their own decentralized blockchain network with just a few clicks. This is a huge claim considering the difficulty of achieving that task from scratch. The really good news for Ethereum is that the new service will soon have support for the Ethereum network due to some of its unique properties. On their website, they declare that “Ethereum is well suited for highly distributed blockchain networks where transparency of data for all members is important”. This is a huge deal for Ethereum.  

Elon Musk Declares His Faith In Ethereum with One Word

Elon Musk has caused another stir on Twitter, this time in the blockchain world. He did it with a one-word tweet, “Ethereum”. The tweet has gained almost 10,000 retweets since then. That’s a big endorsement coming from one of the greatest tech visionaries of our time. Especially, as it comes when Ethereum has been struggling.  

Many Other Companies Are Onboard With Ethereum Too

These are just the most recent additions to the list of big names declaring their support for the Ethereum vision. The Ethereum Enterprise Alliance is a group of big businesses committed to exploring and developing the decentralized technology that Ethereum is built on. The members include some massive names, such as Intel, Microsoft, JP Morgan, Accenture, and Deloitte. JP Morgan has even used the Ethereum technology to build its own blockchain networks for moving some of its enormous sums of money quickly around the globe.  

So Why Isn’t Ethereum Number 1 Yet?

All this should be enough to propel Ethereum into the stratosphere of development and adoption. But a quick look at the price and market cap numbers shows that Ethereum is even further behind Bitcoin than it was a few years ago. Ethereum has dropped massively since its peak price of over $1,000 and has never recovered to anywhere near those levels. So what’s going on?  

The Same Old Scalability Problems

Ethereum has had one serious challenge for the last few years: scalability. Ethereum has never really managed to breach its transaction ceiling of around 26 transactions per second. That level is just not going to cut it out for a major global transaction network. Bitcoin has the same problem, but it has some exciting solutions already being used and tested. The Bitcoin Lightning Network is a “layer 2” solution that is used to scale Bitcoin transactions on top of the core Bitcoin network. Ethereum does have some potential solutions of its own. Ethereum Plasma promises to add a layer 2 solution to the Ethereum network to allow for much higher transaction volumes. However, right now, these projects are still far off proving they can take Ethereum to a global scale.  

The Growing Threat of Competitor Networks

Perhaps the biggest reason why Ethereum hasn’t soared to the top spot on the crypto charts is the growing number of serious competitors to Ethereum. Until recently, Ethereum has been the only real choice for developers in need of a global decentralized network to build their applications on. The same with ICO platforms, too. This gave Ethereum the first mover advantage and helped it grow tremendously in its early stages. These days, however, Ethereum has plenty of plausible competitors. Using the Ethereum network isn’t a necessity for developers, it’s a choice. For example, while Amazon plans to support Ethereum for their managed blockchain solutions, it already supports Hyperledger Fabric. The growth of alternative networks and protocols such as EOS, Stellar, Cardano, Tron, Neo, and many more are hurting Ethereum. What’s more, many of these networks already offer much better performance than Ethereum in certain areas. For example, EOS is a protocol designed to build decentralized applications similar to Ethereum’s. But, with a completely different take on its consensus algorithm, it allows for a much higher transaction volume and speed than Ethereum. These competitor networks are now highlighting the weaknesses of Ethereum. They are putting pressure on the Ethereum development team and adding more uncertainty to the future of the Ethereum network.  

Bitcoin is Seen Differently

Bitcoin is facing many of the same technological problems, and even more competitors for its limited use cases. However, Bitcoin has kept growing because it is seen in a different way by buyers. These days, Bitcoin is seen more as ‘digital gold’, than the future central financial platform. Bitcoin buyers know that faster and better competitor networks may arise, but Bitcoin is still the original cryptocurrency. This is why Bitcoin buyers are happy to invest heavily in the cryptocurrency, even as real-world use cases and adoption remain fairly stagnant.  

Ethereum Needs to Really Compete

Ethereum doesn’t have the same advantages as Bitcoin. If it wants to cement its place as the number one decentralized network in the world, it needs to earn it. It needs to prove its value by developing technology that works in the real world, and applications that get used. Ethereum has got the support of tech giants like Amazon and influencers like Elon Musk. But, if ETH is ever to overtake BTC, it needs to use that support and take it to the next level as soon as possible.
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Press Releases

Storecoin’s Third Milestone Token Offering Launching, Ari Paul and BlockTower Capital are Early Backers

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Storecoin
June 20th 2019 Milestone Token Offering (MTO) Planned for Storecoin This Regulation D and Regulation S securities offering sets out to bring in over 500 new wallets, and up to $4.97 Million of Treasury into the project. Storecoin is a zero-fee payment and p2p cloud computing platform with early backing from Ari Paul of BlockTower, Matt Ocko, AlphaBit Fund, Ari Nazir of Neural Capital, and more -- is launching its long-awaited Milestone Token Offering on Thursday, June 20th at 12pm PT. Apply for the sale at: http://sale.storecoin.com.   Storecoin forecasts 1-3 additional MTO’s as it continues to execute on its mission before the mainnet launches. Storecoin has taken a strong anti-ICO stance since the inception of the project. We are a committed to growing Treasury on the basis of achieving key project milestones. These global MTOs align with transparency and trust for it’s growing the community and eager participants. Here's a link to see key Storecoin milestones achieved since its last MTO in January 2018.   About this Milestone Token Offering (MTO) Storecoin will sell up to $4.97 Million in STORE during this Security Token Offering. The global Regulation D and Regulation S offering aims to bring 500 new wallets to the project, with the purchase minimum at $2,500 and maximum at $1.79 Million. This milestone sale ends once one of the following occurs: the $4.97 Million maximum cap is reached or by August 30, 2019. United States purchasers must qualify as accredited investors. Sales to purchasers who are not U.S. Persons will be made only in accordance with applicable laws. The sale will be offered as a sequence of three phased pricing rounds. Each sale phase will be offered on a first-registered and first-funded basis. Once a phase is fully registered and funded, the next phase will open up and be offered to the next registered buyer.   The proceeds from this sale will be used for a number of vital project building activities, including:
  • Releasing the alpha network for BlockFin, our parallel and pipelined consensus engine
  • Multiple security audits for our BlockFin BFT consensus algorithm
  • Begin hosting STORE meet-ups around the world
  • Releasing our Governance, Economics, and Security Papers for public peer review
  • Hosting the first-ever Conference, a research and governance global gathering
Register for the Milestone Token Offering at: http://sale.storecoin.com   About Us Zero-fee payments and p2p cloud computing platform. The public blockchain will enable data to be tokenized, open, and globally tradable. Storecoin will transform data into p2p money (into datacoins). Governance will be coordinated by checks and balances, separation of powers, and shared security (decentralized federalism). Storecoin is a verified Messari Registry project: https://messari.io/asset/storecoin To learn more, visit http://storecoin.com. Download a one-pager at http://storecoin.com/summary (PDF).   Links E-mail: team@storecoin.com Website: http://storecoin.com Telegram Group: http://t.me/storecoin Twitter: http://twitter.com/storecoin
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