How to secure business funding

How to secure business funding

Reading Time: 3 minutes

Getting funding for your business may seem like a scary task. Where do you start? How much do you need? How will you repay? 

The good news is, it’s easier than you may think. But, before we get into the good stuff, let’s debunk some common small business funding myths.

  1. Venture capital is a growing opportunity for funding businesses

Actually, this isn’t the case. It’s still very rare, especially in the South African market. When most people say ‘venture capital’, they really mean outside investors.

  1. Traditional bank loans are the best option for funding a new business

Most traditional banks don’t fund startups & this is due to the ‘high risk’ involved. You would need some sort of self-acquired capital before you can approach a bank.

  1. Business plans will land you investors

A great business plan won’t automatically attract viable investors. You would still need to have a strong team in place to have made progress, and better yet; traction – for example, paying customers.

It should come as no surprise that one of the biggest challenges small businesses face is securing funds to grow their business and take on new opportunities. 

But, luckily in 2022, there’s been an increase in funding choices for entrepreneurs. So let’s take a look at how you can access business funding. 

Be intentional with the type of funding you need

Before you can secure funding, you need to know what you need the finances for. Is it to pay a bill? Update your business systems? Or pay salaries and wages? Once you’ve figured out the purpose of the funding, you’ll be able to answer an important question; is it short-term or long-term funding?

Determining the purpose of your funding will save you time during the application process. Knowing exactly what you’ll be using the funds for also helps you to manage your cash flow better. 

 

Related: 5 Reasons why access to business funding is important

 

Keep it local

When you keep things simple, you’re more likely to find a faster solution for your problem. The same goes for funding. Your South African business should be funded by a local funder who understands your specific economical needs. 

This way, the regulations are all aligned and the currency is the same. South Africa boasts many organisations and alternative lenders whose core business is to drive SME growth. 

Lulalend offers small businesses the opportunity to access up to R5 million in business funding and 60 days of cost-free capital – what businesses wouldn’t want to benefit from that? 

 

Think outside the box

If you’ve tried bootstrapping, called upon all your friends & family, or maxed out your credit card, now is the time to think outside the box. Looking at alternative lenders is a great way to get the funds you need, and fast. 

The beauty of alternative lending is that their application processes are not as long & paper-heavy as traditional banks. Another plus is that their main objective is assisting your business’s cash flow management. So if you need a quick turnaround, this is the way to go. 

At Lulalend, we offer application outcomes and funds in your bank account within 24 hours. 


Related: The SME Guide to Business Funding

 

While sourcing funds for your business from the right lender may seem like one of the hardest tasks of being a business owner, we know it’s also the most rewarding. That’s why Lulalend is committed to helping businesses access fast, hassle-free funding online so that you can get back.

 

 

The importance of financial planning for SMEs

The importance of financial planning for SMEs

Reading Time: 2 minutes

A well-thought-out financial plan is crucial for the success of a small business.  It’s a road map, a guideline, and a reminder of what you want to accomplish in the short and long term. It sets out your potential costs and attempts to explore ways to manage them. Having a strong financial plan also puts your business in good standing for potential investors, creditors, and even customers.

This article outlines the following key aspects of financial planning

  1. Helps you manage your cash flow
  2. Identifies good & bad business trends
  3. Helps you measure your businesses growth

 

Helps you manage your cash flow

The income of most businesses tends to vary from season to season. A good financial plan accounts for these highs and lows so that there are no shortages in the long run. Having a cash cushion ensures that your business can weather a bad season and still come out on top. Tax planning, careful cash flow spending, and budgeting and forecasting can all result from thorough financial planning.

 

Related: Does Alternative Lending Make Sense as a Cashflow Management Tool for Your Business?

 

 

Identifies good and bad business trends 

The decisions made by a small business owner can have both positive and negative consequences. A good financial plan can identify positive and negative trends that could have simply gotten lost in a sea of numbers. This will allow you to better allocate funds to areas that are profitable for your business and avoid spending that is ineffective.
Financial planning can also assist you in prioritizing your expenditures. Conserving financial resources is essential in small businesses. A well-thought-out financial plan can help you prioritize which areas require immediate funding and which can wait until you have a better season.

 

Related: 4 Ways to improve your business’s cashflow

 

Helps you measure your business growth

Overall, the financial plan is there to help you track your progress. How did your season go? What steps have you taken to reach your objectives? When a small business owner is knee-deep in the day-to-day operations of running their business, it is easy to lose sight of the strides they have made to grow their small business. The financial plan allows the small business owner to see exactly what is going on by reviewing and analyzing the hard data.
In short, if a small business owner wants to be successful for years to come, they must have a meticulous business plan that is updated on a regular basis.

 

 

Apply for Bridging Finance with Lulalend

We have solutions that offer your business a cash flow boost when you need access to funds sooner rather than later. We offer bridging finance that is unsecured, and easily accessible within 24 hours. We also offer the option to settle early without having to worry about penalty fees.

 

The SME Guide to Conducting a Business Review

The SME Guide to Conducting a Business Review

Reading Time: 3 minutes

 

The latest guide in our Business High Five series, The SME Guide to Conducting a Business Review, takes an in-depth look at how you can assess & improve the operation of your business at any given time.

Download our complete guide to Conducting a Business Review 

In this guide, your SME will be able to make use of insights on:

  • The Importance of conducting a business review
  • How to conduct a basic business review 
  • Practical learnings to expect 
  • Key aspects to avoid when conducting a business review
  • Recommendations on steps to follow when conducting a business review

 

 

The Importance of Conducting a Business Review 

Once your business is set up and has started to run well, most SME owners are inclined to let the day-to-day order of things run as they are. 

It’s at this point, however, time to rethink your strategy. Following the critical early stages, you should evaluate your progress on a frequent basis, develop ways to maximise the market position you’ve established, and decide where to take your company next. Your business strategy will need to be revisited and updated.

 

How to conduct a basic business review

According to Lulalend’s CEO & Founder, Trevor Gosling, it’s very important to step out of the day-to-day and review your company’s performance. “Some areas should be reviewed more regularly than others, most notably financial performance, to ensure you are tracking your business goals.”

Many small businesses operate in a reactive, short-term manner. This gives you more freedom, but it can also cost you time and money as you transition from the beginning stages of your organisation to growing and improving it.

 

Related: The Basics of Reviewing your Business Model

 

Practical learnings to expect 

While the main aim of conducting a business review is to figure out how you can redefine your business goals to further your success, there are other key learnings you can gain from this. 

“The biggest thing about reviews is that they help shape the future of your business by giving clear indications of areas that need the most attention. Without this understanding, you can be focussing your energy in areas that won’t necessarily make a difference in the way you perform,” says Gosling.

 

Key aspects to avoid when conducting a business review

It’s easy to get caught up in the execution of a business review but one should also be wary of the common mistakes business owners tend to overlook in doing so. 

“Just like spending too much time on day-to-day operations is not healthy for your business, spending too much time on a business review can also be harmful,” advises Trevor Gosling. “Keep a healthy balance, don’t get lost in the details and when things are not completely clear, don’t be afraid to go with your gut!”

 

Related: How to write the perfect business plan

 

Recommendations on steps to follow when conducting a business review

Gosling stresses that you should “always have a plan or goals that you can track your business against. That’s the crucial starting point and without it you’re operating in the dark. When you track your performance against your goals, it very quickly highlights where things are going well and where you are missing the mark. But goals are never static and need to be developed/refined, particularly as your understanding of the market improves, to ensure you are setting targets that make sense and are achievable.”

 

Download the full SME Guide here.

 

What can 60 days of cost-free* funding do for your business? 

To help SMEs get the funding they need to grow their business sooner, rather than later, we offer a 60 day delayed repayment option to all first-time customers. So if you apply for funding today, you won’t have to start repaying for 2 months.  If prompted enter promo code LULA when applying.

 

The SME Guide to Improving your Cash Flow

The SME Guide to Improving your Cash Flow

Reading Time: 3 minutes

The latest guide in our Business High Five series, The SME Guide to Improving your Cash Flow, offers useful insights to help you manage and improve your business’s cash flow and increase profits. 

 

Download our complete guide to Improving your Cash Flow

 

In this guide, your SME will be able to make use of insights on:

  • The Importance of a Cash Flow Strategy
  • Practical Tips on How to Manage your Cash Flow
  • Technology to Help Manage your Cash Flow in Real-time
  • Sustaining Your Cash Flow Improvements
  • Cash Flow Management Tools

 

 

The Importance of a Cash Flow Strategy

Proper cash flow management is a critical strategy that any business owner must understand if they want to achieve long-term financial success but is also one of the most difficult issues that business owners confront. 

Reliable cash flow projections are likely to increase shareholder trust, while enhanced budgeting should help you gain better control over costs and generate higher profits. 

 

Practical Tips on How to Manage your Cash Flow

The best way to avoid a cash shortage is to plan ahead. As soon as you foresee a cash shortfall coming up, it’s important to look at all the options you have to increase your cash in hand.

 

  1. Be forthcoming with customers
  2. Review your operational expenses
  3. Re-evaluate the pricing of your goods and services
  4. Secure funding before you need it

 

Related: 3 Ways Bridging Finance Instantly Improves Cash Flow for Your Business

 

Technology to Help Manage your Cash Flow in Real-time

As a business owner, you should use technology to simplify and improve the efficiency of your company’s operations. You can budget and easily forecast future cash flow when you can see all of your business’s financial activity and accounts in one place. This is where online financial management dashboards can add so much value. 

Sustaining Your Cash Flow Improvements

Any cash flow improvements you gain may soon deteriorate if you do not have an adequate cash management system. Many SME owners ignore the small changes that can be made to their operations, believing that the changes are insignificant and not worth the effort. However, a combination of minor modifications to inflows and outflows will have a significant influence on your overall cash flow.

 

Related: The SME Guide to Cash Flow Management

 

Cash Flow Management Tools

Our talented financial experts at Lulalend have put together a list of cash flow tools to help you get a better view of your businesses’ finances so you can plan more accurately for the future. The two options below have proven beneficial for many businesses across the board and are worth the investigation.

PlanGuru

Float

 

Download the full SME Guide here.

 

What can 60 days of cost-free* funding do for your business? 

To help SMEs get the funding they need to grow their business sooner, rather than later, we offer a 60 day delayed repayment option to all first-time customers. So if you apply for funding today, you won’t have to start repaying for 2 months.  If prompted enter promo code LULA when applying.

 

4 Ways to improve your business’s cashflow

4 Ways to improve your business’s cashflow

Reading Time: 3 minutes

Keeping track of your business’s incoming and outgoing cash flows can be tricky, but is critical during uncertain times where revenue may fluctuate. Here are 4 simple and useful actions you can start today to help you manage and improve your business’s cashflow. 

 

Here’s a quick look at what this article will cover: 

  1. Invoice quickly
  2. Offer various payment options
  3. Use software to manage your cashflow
  4. Review your operational expenses regularly

 

Invoice quickly

The faster you invoice your customers, the quicker you’ll get paid.  Rather than waiting until the end of each month, send out your invoices as soon as you have rendered a service or delivered goods. Your customers will still have 7, 30, or 60 days (whatever your business terms may be) to pay, but you’ll save yourself valuable time right from the start. With Lulapay, you can invoice your customers & get paid immediately while still offering them payment terms. Find out more about Lulapay here.
If this doesn’t work, you can also send payment reminders to those “late-comers” or simply pick up the phone and call them.

 

Offer multiple payment options

By offering your customers various ways to pay, including online options such as accepting credit cards, debit cards, or mobile payments, the more likely they are to pay you faster. For example, making use of mobile payments can get you paid on the spot as soon as the job is done. There are plenty of ways of doing this by using services such as YOCO, Zapper, Snapscan, and even Masterpass

 

Related: 7 Ways to manage your cashflow in your construction business

 

Use software to manage your cashflow

Managing the cash flows in and out of your business can be challenging enough, but dealing with the additional accounting and tax work that comes with it is another task. Consider using a cloud-based accounting system such as Xero & Sage to make managing this easier. More advanced systems come with built-in plugins like project costing, quoting, and inventory management to help alleviate the burden of system administration and automate these processes for you – giving you valuable time to focus on growing your business. 

 

Review your operational expense regularly 

Managing your cashflow isn’t only about the money that comes in, it’s also important to reduce the cash going out of the business as much as possible. Take the time to review your expenses and see in which areas you can reduce your operational costs. Avoid spending money on things that aren’t necessary for your business and choose wisely which areas you want to focus on. Make sure you cut costs only where you can afford to and don’t cut back in areas that may harm your business. 

 

Related: Practical cost-saving tips for your business

 

Understanding your business’s cashflow will not only help you plan for future growth & development but will also give you great insights into your businesses’ current financial state and how cash is moving within your organisation.