In Brazil, where 99% of businesses are small and medium-sized enterprises (SMEs) and account for more than half of formal jobs, access to credit remains one of the biggest challenges for businesses. The problem is not new, but it persists as an invisible barrier that stifles opportunities, limits investments, and reduces growth potential.
According to SEBRAE data, there are 6.4 million establishments in the country, of which over 6 million are small and medium-sized enterprises. However, in practice, a large portion of these businesses face a financial market structured to serve giants, not small entrepreneurs.
Gabriel César, CEO of M3 Lending, a fintech that facilitates credit access for businesses, comments on the issue. He highlights some of the main difficulties faced by SMEs, such as bureaucracy, strict requirements, and lack of credit history—barriers that limit these companies’ growth. But don’t worry, there are alternatives to overcome them. Check them out:
1 – Requirement of guarantees
The requirement of guarantees is one of the biggest challenges SMEs face when seeking credit. Most of these businesses do not have sufficient assets or collateral to offer banks, which restricts their financing options and makes credit inaccessible, especially for businesses in the consolidation phase. This scenario limits companies’ growth, as without adequate credit access, they struggle to invest in expansion, modernization, or improving competitiveness.
Additionally, since SMEs are considered riskier due to their nature and size, financial institutions tend to demand more robust guarantees, such as real estate or high-value equipment, which often falls beyond these businesses’ reach. This leaves many entrepreneurs outside the scope of traditional credit lines.
2 – Credit history
Another major challenge for SMEs is the lack of a credit history, which makes securing financing difficult. To build a strong financial reputation, businesses need access to credit, but without prior history, banks often deny loans. This vicious cycle hinders small businesses’ growth, limiting their expansion and investment opportunities.
Moreover, many entrepreneurs struggle to prove their financial management and profitability, which are key factors in obtaining credit. As a result, alternatives like personal credit often come with higher costs and are not ideal for sustaining long-term business growth.
3 – Financial disorganization
Financial disorganization is another bottleneck when seeking credit. The lack of accurate, well-structured information makes it harder for banks to assess a company’s financial health. “Without organized balance sheets and formal documentation, many businesses can’t even start a credit application. The difficulty in meeting bureaucratic requirements not only delays the process but also frustrates entrepreneurs, who end up losing time and opportunities,” explains César.
Therefore, financial organization should not be seen merely as a bureaucratic matter but as a strategic tool for business success. Adopting sound financial management practices—such as keeping rigorous accounting records, planning cash flow, and organizing tax obligations—is essential not only to facilitate credit access but also to ensure long-term business sustainability and growth.
4 – Choosing the wrong credit line
Additionally, selecting the wrong credit line can turn into a real trap. “High interest rates and repayment terms misaligned with cash flow often result in even greater financial imbalance for SMEs,” warns the CEO. For those already facing challenges like outstanding debts and a history of default, the challenge becomes even greater. “Financially troubled businesses are seen as high-risk, and the banks’ response is usually the same: denial,” he adds.
Moreover, many financial institutions offer credit lines that seem advantageous at first glance but later prove detrimental. A lack of thorough analysis of a company’s financial profile can lead to payment conditions that don’t match SMEs’ revenue-generating capacity. This poor planning can even drive businesses—which might otherwise recover—into bankruptcy.
Platforms help with higher amounts and lower interest rates
This is why alternatives like fintechs and digital credit platforms are gaining traction. M3 Lending, for example, relies on a model that directly connects businesses in need of credit with investors seeking returns. “Our interest rates are 22% lower than those of conventional banks, in addition to offering a digital, streamlined process,” says César.
The fintech’s goal is to unlock credit for SMEs in an accessible, transparent, and less bureaucratic way. “Our mission is to give small and medium-sized businesses the chance to grow without being held hostage by a system that often doesn’t see them as a priority. Technology enables this, and we’re here to bridge that gap,” concludes the CEO.
Founded in Belo Horizonte (MG), M3 Lending began operations in 2021. The fintech connects small and medium-sized businesses seeking credit with investors—primarily individuals—who want to allocate capital to these businesses. With just R$250, any investor can join the platform and diversify their investments while supporting the growth of Brazilian entrepreneurs.
Currently, there are over 2,000 people connected to M3, both as credit seekers and investors, according to the CEO. “It’s a more inclusive financing model, connecting those who need working capital with those who want to invest, contributing to business growth.”
Among the main reasons for seeking credit, according to the company, are purchasing new inventory (20%), opening new locations (25%), expanding facilities (15%), and scaling operations (40%). “This shows that businesses are seeking credit to grow and strengthen working capital,” emphasizes Gabriel Sousa César, CEO of M3.
As a result, the fintech can offer better credit terms—even compared to conventional banks. For the same case, the available amount could be over 50% higher than what a traditional financial institution would offer, estimates the CEO.
