Financing digitalisation - a challenge for many companies

Artificial intelligence, big data, process automation and other trends are the terms of the hour when it comes to digitalisation.  Digital transformation is much more than one's own website and accounting system. For SMEs, which are the mainstay of the economy, digitalisation is a major challenge. The pandemic has accelerated this and bluntly demonstrates the change from analogue to digital.

Swiss SMEs, unlike start-ups that start directly with investment capital in the digital world, have to use their own financial means and resources to finance the changes.

It's different for start-ups

Traditional SMEs first have to grow into the digital business models. Financially, there is often little room for manoeuvre, which often means that digitalisation only happens in small steps and advances slowly. Many studies show that SMEs invest out of cash flow. Loans to undertake large projects tend to be the exception. Start-ups usually pursue digital business models from the outset and are also financially positioned and structured differently.

Financing barriers for digital products

Collateral is crucial for banks to grant investment loans, and in a digital world where intangible assets such as data and IT skills are more important, challenges arise for securing financing. In addition, a company that invests in digital technologies for strategic reasons needs qualified personnel. With the help of digitalisation projects, companies want to make their traditional business model fit for the digital future and smart demand markets. Here, the approaches and the needs are very different and each company goes its own individual way.

Not only standard solutions are in demand

Automated production processes or the implementation of ERP software are standard solutions that are not applicable or necessary in all companies. Often, SMEs use customised solutions that the companies design independently or develop with partners. Often, however, there is a lack of smart external financing options to quickly put projects into practice. Applying for funding is usually very time-consuming and tedious for such projects.

Pioneers are needed - especially for financing issues

Ambitious digital projects are a risk from a bank's point of view. Basically, there is not much difference between venture capital for a start-up and a strategic project for digitalisation in an already existing company. When a medium-sized company digitally transforms itself, it is much more than just adapting the means of operation to the challenges of the future.

Here, too, pioneers with new approaches are required to guide the companies through the transformation and address issues such as

- Data and IT security

- System and process automation (Industry 4.0)

- own development of digital platforms and distribution channels

- company-wide structures for data transmission and networking

- application of BigData and artificial intelligence

technical and financial support.

Similar to a start-up whose business model is based on presenting smart and digital solutions from the outset, a digitisation project in an SME involves financing and financial requirements. SMEs embarking on the digitalisation journey need a new business plan 2.0.

Financing difficult to assess

Material issues take a back seat in digitisation projects. It is about a long-term strategy and its financing. It is difficult for the companies themselves to estimate the financial requirements. Smaller companies in particular rely on their own financial potential and invest from their own resources. However, the consequence of this is that digitisation is only making very small progress.

Discover a new approach at and combine know-how, digitisation and financing to accelerate your projects and ensure sustainable operations. We help you to achieve more with investments from the operating cash flow and are happy to advise you without obligation.

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