"Daring to invest in order to grow"
Interview with Anne Bucheli, Enterprise Market Lead at Societe Generale
You're well acquainted with the development challenges faced by SMEs. Is investment a prerequisite to creating growth?
Anne Bucheli: Yes, and this is generally agreed upon. Companies that invest are more successful. Their managers choose a course of action, set objectives and obtain the financial means to realise their plans. That said, the decision to invest carries significant implications. Whatever the plan may be—be it upgrading a production facility, undertaking innovation, establishing an export development plan or carrying out an external growth operation—the decision represents a medium-term or even long-term commitment by the company. Therefore, the right partners and means of financing should be chosen.
What solutions are available to business leaders seeking to finance their investments?
A.B.: There are several. Often the first choice of managers, particularly if they run a family business, is self-financing. However, this means of financing is not always easy to implement because it requires significant cash resources. In this respect, if you don't have deep pockets, you risk compromising the company's ability to operate. Another limitation is that self-financing means companies can't optimise the tax benefits offered through investment. For these reasons, many business leaders also rely on bank financing. This option has the advantage of enabling companies to reduce their taxes since, generally speaking, interest is fully deductible from taxable income. It also gives access to a range of financing solutions that can be tailored to each company's needs, whether it's investing in machines, undertaking a building project, upgrading IT equipment or acquiring a fleet of vehicles.
Raising money is one thing, but it's not the only concern. What do business leaders expect from their financial partners?
A.B.: Indeed, the relationship is not simply limited to a transfer of funds. In an environment that challenges companies to find drivers of growth, particularly on high-potential external markets, business leaders need specific kinds of financial resources as well as meaningful support. As we've seen on the ground, what they want is strong expertise, but they also need a close working relationship. They want to talk to people who know them and can respond to their requests quickly. When their needs relate to a specific area of expertise, they also want to talk to a specialist who can guide and support them in their choices. This is also where the added value of a financial partner plays a role.