WHAT DO WE OFFER?
Many small, medium and micro-enterprises struggle with cash flow – signing a deal is one thing, but financing it until the client pays can be a challenge, and often means that SMEs are unable to take on large contracts that could help grow their business.
Small businesses have not necessarily built up a credit track record – either with traditional banking institutions or their suppliers, and access to credit can be tedious and not necessarily sufficient. SME funding is the solution, and can be a lifeline to many small businesses that have the ability to complete contracts, but funds are limited.
HOW DOES IT WORK?
Small businesses can apply for SME funding to cover the costs of the goods at their supplier. The SME funder pays the full cost of the invoice to the supplier, allowing the business to deliver as promised.
SME funding can be applied for once a small business has a purchase order from their client. Upon proof of payment from client, the small business is paid the balance of the invoice – in other words his profit – less the fee charged by the SME funder.
THE FUNDING PROCESS
WHAT ARE THE BENEFITS?
There are numerous benefits for SMEs who decide to make use of this funding model:
- No reliance on traditional credit or financing institutions.
- Ability to build a track record with suppliers.
- Maintain supplier relationships.
- Ability to tender for bigger projects.
- Opportunity to grow reputation as a small business that delivers.
- Improve cash flow in the business.
- Better financial planning & management.
Companies can also recommend SME funding to the smaller suppliers on their database, with the following benefits:
- Help develop small business.
- Improved BEE scorecard for preferential procurement from emerging micro enterprises (EMEs).
- Improved social economic development rating for BEE scorecard.
- Build relationships with suppliers.
- Ensure service delivery on time and as promised.