How fintechs help SMEs avoid judicial recovery

Judicial recovery is one of the most worrying signs that a company faces serious financial problems. To avoid getting to this point, it is essential that small and medium-sized companies (SMEs) manage their finances intelligently and strategically. Fintechs have played a crucial role in this process, offering solutions that help companies avoid extreme financial crises.

The seriousness of the problem becomes evident in the recent records of judicial reorganization requests made by these companies. In July, SMEs registered 166 requests, representing 72.81tp3 t of the total of 228 requests made by companies of all sizes — the biggest result for the month since the beginning of the Serasa Experian historical series in 2005.

These numbers show the lack of healthy financial management, which takes many SMEs to the limit of their capabilities, forcing them to seek judicial protection to renegotiate their debts. Fintechs offer a more efficient and personalized approach to financial management, allowing SMEs to better organize their cash flows and make responsible administration of their commitments. Through innovative tools, these companies help SMEs understand their finances in detail and make data-based decisions, which is essential to avoid delays in payments, defaults and the need to resort to judicial reorganization.

Effective credit management is essential mainly for small and medium-sized enterprises (SMEs), as access to financing generally depends on clarity and accuracy in the cash flow statement. Companies that fail to show their results clearly face difficulties in obtaining loans from banks and other financial entities. When credit is needed, it often comes with high rates, such as overdraft or working capital, which can compromise the financial health of the business.

With more flexible payment terms and reduced interest rates, SMEs are able to maintain a healthy cash flow, strengthen their business relationships and focus on business growth without the constant concern with financial crises. In Brazil, where approximately 8 million companies are SMEs representing 30% of GDP, but receive only 7.5% of the available credit, the performance of fintechs becomes fundamental to improve this discrepancy and promote the economic development of the sector.

With an innovative and personalized approach, Justa and other fintechs are transforming the way SMEs handle their finances, ensuring that these companies have the support needed to grow and thrive. The “split” system, which automates the division of payments into business transactions, allows the amount paid in a single transaction to be automatically divided between different parties involved, ensuring security, saving time for participants.

Split is especially useful for SMEs who need to secure recurring payments and avoid double taxation. For example, when a customer makes a purchase at a store, the amount can be divided into real time between the establishment and the service provider, without the need for additional steps or manual processes. This system is a reflection of the technological advance in the means of payment and helps to reduce the risk of default, providing a more efficient financial management.

*Eduardo Vils is president of Fintech Justa, whose mission is to make the market fairer.