Why Successful SMEs Use a Credit Facility to Boost Business Funding

Why Successful SMEs Use a Credit Facility to Boost Business Funding

If you’re like most businesses, January’s an especially tough month.

We know running a business is never easy. But our data shows us the first month of the year comes with a unique, and trying, set of circumstances.

Early results from our “What’s it like to be a SME in South Africa” survey found many of you rate January as your most difficult period. (Complete the survey here.)

A few businesses we’ve spoken to say they’re struggling to pay suppliers after a slowdown in December.

Others need fast access to finance to manage the Valentine’s Day rush, a new contract, or an unexpected business expense.

It’s when simple, quick business funding sets SMEs up for success in the new year.

And here’s where a credit facility comes in.

Think about it.

What difference would it make in your business if you could access up to R1.5 million whenever you needed it?

“User-friendly, efficient” Business Funding

A lack of funding holds businesses back. Not only that, but cash flow challenges place business owners under immense stress. Instead of jumping on opportunities to grow, you’re up at night, worrying about how to pay unexpected expenses.

And you’re not alone.

The Global Entrepreneurship Monitor report found access to finance was one of the biggest obstacles to business growth.

It’s why more and more business owners are using our credit facility to purchase stock or quickly add new team members when they take on new contracts.

One of them is Stefan Jordaan, the owner of Expidor 147, a wholesale supplier of dental products.

When Expidor 147 experiences a growth spike, Jordaan taps into his Lulalend credit facility.

“The whole process (of accessing funds) is user-friendly and efficient,” said Jordaan.

Instead of having to re-apply for business finance, Jordaan accesses his line of revolving credit whenever he needs funds.

The cash is available immediately.

Here’s a few other reasons why so many of our customers use our credit facility:

    • You only pay for the funds you use
    • You can settle whenever you want, no early penalties
    • You pay no monthly admin fees for having the facility

And because the facility works like revolving credit, the capital amount becomes available again after every debit order.

You Want Fast, Flexible Business Funding

Tracy Kukard, Business Funding Specialist and Account Manager, said many businesses prioritised easy access to funds.

“A lot of businesses like to have month to month access to a lump sum of funds that they can access at anytime when a particular business need arises.”

What this means is that if a business secures a new contract that requires more staff or equipment, for instance, they can tap into their revolving credit facility.

Businesses across industries are applying for the credit facility, said Lene Schlebusch-Kemp, Business Funding Specialist and Account Manager.

A major draw is the facility’s flexibility.

“There’s no requirement or limitation on how much you use or what you use it for. If you’re a business looking to grow, fund flexibility is crucial.”

Unlike credit options with traditional lenders, Lulalend’s facility imposes no initiation, admin, or credit life charges.

Credit Facility FAQs

Here’s answers to some of the frequently asked questions you’ve had about our credit facility:

How do I apply for a credit facility?

If you’ve previously taken out funding from Lulalend, the application is even easier. Because your financial information is already linked, the process of assessing your eligibility for our credit facility is even faster.

Contact support@lulalend.co.za or speak with your dedicated account manager for more.

If you’re not an existing Lulalend customer, apply within minutes here. Funding is approved in 24 hours.

How soon can you access the credit facility?

Once you’ve completed your profile, which includes making sure your financial information is complete, you’ll be able to withdraw from your credit facility.

How do I withdraw from my credit facility?

Log onto your Lulalend profile and go to the Credit Facility tab. You will see the available amount that you are able to withdraw. Select the amount and click “Withdraw now”. A legal agreement will be presented to you to sign online. It’s as simple as that.

Where can I get more info about Lulalend’s credit facility?

You can read more about how our credit facility works here, or you can watch this quick video which sums it up in a few minutes.

 

How Fast Business Finance Helps SMEs During Load Shedding

How Fast Business Finance Helps SMEs During Load Shedding

A year ago, Ockert Cameron sat down and planned the annual budget for his business, Raw Food for Pets.

What he didn’t know then was that the crippling power cuts that spread through the country last year would send his costs ballooning.

“It’s my financial year-end in February, and we’ve spent more than R100k that we didn’t budget for just to make sure we can continue operating,” said Cameron.

Raw Food Pets is an online store, supplying healthy, natural pet food for domestic dogs and cats across Gauteng.

Cameron is one of thousands of business owners who continue to take strain under the pressure of ongoing load shedding.

And it’s only going to get worse.

It’s why businesses like Raw Food for Pets—business like yours—need fast, easy access to business finance during a time of crisis.

Emergency Task Force Fast-Tracks Business Finance Applications

In December last year, small businesses were hammered by the deepest power cuts yet. For the first time, South Africa experienced Stage 6 load shedding.

An analysis by the Bureau for Economic Research found that these outages sent manufacturing and business activity plummeting throughout the country.

That’s when Lulalend CEO, Trevor Gosling, stepped in, announcing the launch of the SME Load Shedding Task Force. This unit set out to accelerate applications for business finance driven by the impact of load-shedding.

“Typically, applications for business finance take 24 hours to process. When a business tells us they’re being severely affected by load shedding, we prioritise that application so we can help them survive,” said Gosling.

Lulalend is running a countrywide survey of SMEs to gain a deeper understanding into the needs of South African business owners.

“Early results show more than 60% of businesses are struggling with losses due to power cuts,” said Gosling.

Typically, applications to traditional financial institutions take weeks or longer, added Gosling.

And right now, when the money can’t come soon enough, having the ability to get cash quickly makes all the difference.

“Because Lulalend uses technology to score businesses based on real-time performance, we can get the best funding to our customers, fast.”

Access to Business Finance Critical for SMEs

Raw Food for Pets is one of the businesses that have secured funding from Lulalend to deal with the fallout from load shedding.

“I understand why businesses are getting depressed. I understand why people are not happy. It’s not easy…Going to Lulalend has helped us cross this bridge.”

To keep trading, Raw Food Pets has moved to an export cold store. The facility provides three levels of generation, a precaution that doesn’t come cheap: it’s a measure that’s doubled monthly storage costs.

“We’ve had to change the way we store frozen products, but there’s a premium attached to that,” said Cameron.

Staying connected is critical. Raw Food for Pets is an online store; one that strives to meet the needs of its customers, despite load shedding.

That commitment to responsive customer service requires reliable internet access.

A diesel generator and backup for uninterrupted power supply added to the escalating costs, said Cameron.

But for other SMES, there’s been no way out.

Cameron recalls a number of suppliers and competitors that have been forced to shut their doors, resulting in scores of job losses.

“Load Shedding is Something we Dread.”

Now, the survival of SMEs relies on access to business finance.

“For small business owners, load shedding is something we dread. We’ve been lucky, we had some of our own funds when we started the business.

“Businesses are closing, there’s loss of revenue…if this isn’t fixed, the SME market will implode.”

To stem the losses, Cameron suggests creative approaches to small business funding.

“Corporate lenders should consider temporary shareholding in exchange for emergency load shedding funding,” he added.

Secure Your Future With Business Finance

It’s not easy running a business. Studies into SME sustainability show high failure rates, particularly in the first five years.

But it’s even harder when you’re battling to operate without a reliable energy supply.

This is where Lulalend comes in. We provide fast business finance, right when you need it. Qualifying businesses get the funds 24 hours after they apply.

For business affected by load shedding, mention this when you apply, so your application will be fast-tracked via our load shedding task force.

If you’re ready to protect your business’s future, apply for business finance with Lulalend today.

The Winner of Lulalend’s Friends in Funding Competition is Announced

The Winner of Lulalend’s Friends in Funding Competition is Announced

The Lulalend Friends in Funding competition for South African SMEs has announced its winner.

Imraan Moos, the owner of online retailer Your Essentials, was this week revealed as the winner of our Friends in Funding, R500 000 competition.

Now, Moos has an extra half a million to grow his business in 2020.

He’s a South African business owner with bold plans for the new year: creating jobs, developing young people, expanding the product catalogue of his online store.

And that’s all possible thanks to his win.

Your Essentials gets high-quality health and skincare products from global brands to South African customers. Moos’s store stands out in a crowded market with affordable prices and free shipping.

Moos could hardly believe it when he received the news from Tracy Kukard, Lulalend Account Manager, and Trevor Gosling, Lulalend CEO.

“”Surreal…(I was) grateful, happy, excited…all these mixed emotions.”

The cash comes at a crucial time for Your Essentials.

“Entrepreneurship is a journey, and it’s not always an easy one,” said Moos.

“Cash flow is a big thing for businesses. This (win) helps improve cash flow. It allows me to be sustainable long term. They say most businesses fail within the first five years…I’m in year four. Year five is looming… but I will survive for the longer term.”

Moos’s story is one shared by many business owners.

Prior to running Your Essentials full-time, Moos worked a corporate job at a large financial services firm. He spent two years doing a careful balancing act: juggling his 9-5 while building his online business.

Two years ago, he took a courageous step, leaving his full time role behind to devote his energy to his own business.

“This funding will help grow my business much quicker than expected. There’s so much to do in 2020: getting more products into my store…(and) I’d love to employ someone. That’s what SMEs do, we want to grow the economy, give people jobs. I’m also looking to start an entrepreneurship academy for young people.”

Moos is especially excited about the business and learning opportunities presented by the digital age; opportunities he’s fully embraced to build a thriving online business.

He first learned about Lulalend from Takealot, where he sells many of his products online, and PayFast, where he processes his payments.

Last week, Moos was in the middle of a lengthy overdraft application when he received the news.

“I was asking my bank to get additional funding and I got a 30-page document to sign. With Lulalend, you get finance within 24 hours. It’s a really simple process when it comes to securing funding. It’s painless, easy, and the funding is in account within 24 to 48 hours.”

Trevor Gosling, Lulalend CEO, said:

“Imraan’s dedicated to building his business, and he’s dedicated to adding jobs to the economy. Lulalend is honoured and excited to support him on this mission. We look forward to seeing what he’ll do this year.

“At Lulalend, we’re passionate about helping SMEs succeed. And we know that for many business owners, a lack of funding is a major barrier to growth. Access to fast, easy  business funding gives SMEs the resources they need to achieve the kind of success they deserve.”

Businesses that applied for funding with Lulalend before 13 December were automatically entered into the competition. The winner was randomly selected based on the competition requirements.

How Refinancing Can Help Consolidate Your Business Debt

How Refinancing Can Help Consolidate Your Business Debt

Do you want to take control of your finances at the start of the new year?

Like most businesses, you might be returning to normal operations after a quiet period in December.

Maybe you’re looking for small business funding to pay your suppliers now, while business picks up over the next few weeks.

This is exactly why more and more businesses just like yours look to refinance their debt at the start of a new year.

In this blog post, we cover refinancing, a step-by-step process to apply for refinancing, and a comparison of the main small business funding options.

If you’re in a rush, here’s a quick summary:

Refinancing involves taking new funding to consolidate your outstanding loans. Many businesses use refinancing for a boost in cash flow. You can apply for refinancing from Lulalend within minutes here.

Below, we’ll cover everything related to refinancing in detail.

A New Year Trend for Small Business Funding: The Rise in Refinancing

One of the biggest reasons South African businesses stop operating is a lack of finance, according to the Global Entrepreneurship Monitor 2017/18.

It’s a sentiment compounded by study after study.

And that’s not even the worst of it.

All of the leading causes of SME failure can be traced back to cash flow, as stated by the 2015 SME Insights Report, prepared by the South African Institute of Chartered Accountants.

“…from the view of SMEs, they start with too little capital, they collect debtors late, are subject to bad debts, overhead levels that are too high, and they are victims of the risks they haven’t identified. Effectively, a lack of financial planning and control are at the heart of many of their problems,” reads the report.

You recognise these as the challenges that come with building a business you love.

Here’s where refinancing your business debt can make all the difference.

At Lulalend, we conducted an analysis and found a trend: an increase in the number of businesses looking to refinance their debt in January.

Heidi Alson, Lulalend’s Business Funding Specialist, provided context to the data:

“Businesses start the new year and they want to reorganise their financial situation. We often see this renewed commitment to improving business finance at the start of a new year, and refinancing has an important role to play in that process.”

How does Refinancing Work for Small Business Funding

When you refinance your small business loans, your debt is consolidated, explained Alson.

So, for instance, if you have funding from another bank or financial institution, refinancing will cover all of that outstanding debt. Put another way, you are trading those multiple, existing loans for one loan. And that brings your financial obligations into a single place.

What is the Purpose of Refinancing for Small Business Funding?

For most businesses, refinancing helps organise debt and improve cash flow, said Alson.

“Many of our clients who refinance their debt in January benefit from better cash flow. There’s often a gap in getting paid by your customers during the holiday season. Refinancing tides you over, so you can pay your suppliers this month.”

(If you’re struggling with continual late payments, check our blog post for quick strategies to manage late payments.)

How to Determine if Your Business Needs Refinancing

Determining whether refinancing is the best fit for your business begins with gaining clarity on your financial goals.

“You might find there are other financing options that are better suited to your needs. This is where it becomes so important to choose the right lender. You’re looking for a partner and someone that can advise you, so you make a decision that’s truly in your best interest,” said Alson.

For instance, Lulalend also offers a credit facility. And that’s becoming a popular option for business owners who need a line of credit that’s available if they need it, without the need to reapply for finance.

Step-by-Step Process for Refinancing your Business Loans

To prepare for refinancing your business debt, keep these steps in mind to guide the process along faster.

  • Determine the Goal for Refinancing your Business Loan

As part of your refinancing strategy, consider your objectives.

Do you want to consolidate your debt? Do you want access to cash flow?

Deciding on the goal for refinancing will help you make the best choice.

  • Take stock of your financial situation

Review your financial obligations.

When you conduct this financial audit, pull together a list of your current debts and the amount owed on outstanding loans.

  • Gather your Financial Statements

During that audit, you’ll have gathered some of your financial statements. Hold onto these.

For your refinancing application, you’ll need to submit your financial statements.

  • Choose a Lender

There are tons of refinancing options available to you. But not all of those will be right for your business. We’ve discussed the criteria to consider in the next section.

Some funders will charge application, appraisal, and early settlement costs. Keep a close eye on these amounts: they add up…fast.

  • Apply

The application process depends on the institution. Lulalend, for instance, offers a quick, easy online application. Our scoring technology means we can do a fast assessment on your business, so we can give you a decision within hours.

How to Choose a Lender to Refinance Your Business Funding

Once you’ve concluded your business will benefit from refinancing, assess the available options.

There are two main funders that refinance small business debt:

  • Banks
  • Alternative funders, like Lulalend

How do they compare? And what’s the best option to refinance your small business loan?

We’ve put together the criteria to keep in mind when selecting a refinancing lender.

Approval Times

Getting approval from a traditional lender is a tedious process. Typically, it can take up to six weeks for banks to make a decision.

In contrast, Lulalend offers easy online applications. There’s no paperwork required. Apply within minutes and get cash in your account 24 hours later.

Settlement Costs

Monitor settlement costs: banks will impose high prepayment penalties on you. A funder like Lulalend won’t penalise you for settling your debt early.

Customer Service

The last thing you want when sorting out your financial situation is bad customer service. With some organisations, you’ll make call after call, ending up in a long line of customers.

Alson said small businesses should make accessible customer service a priority.

“When you’re on the hunt for a lender, look for a company that offers friendly, helpful customer service. Find a company that understands small businesses.”

Is Refinancing Your Small Business Loan Right for You?

Refinancing can help you declutter your business financial situation. It can help set you on a path to organising your finances. It can chart the way to a better financial future for your business.

Secure your business future, stop stressing about your finances, and apply here for a quote today.

2020 goals you can set for your business

2020 goals you can set for your business

If you’re set on making 2020 the year that your business soars to new heights, we are so with you. For some of you that could mean a real focus on growth, setting more ambitious targets and increasing your customer base. For others it may mean making operational improvements, cutting costs or adding a new product or service to your current offering. Thinking about these things can feel really exciting, and overwhelming at the same time. 

That’s why we’ve put together a few starting points for you to jot down and consider for the year ahead. Setting goals is a way for you to keep focused, prioritise and keep the momentum in your business consistent. 

Cut unnecessary Spending 

You don’t know what you don’t know – we think that’s a pretty fitting saying when it comes to finding ways to reduce your business costs and expenses. Start by looking at where your costs are and decipher which are unavoidable and which you’re able to change or negotiate. 

Tool up with tech

Hello internet. There are now so many affordable online tools that are geared to help you grow and manage various aspects of your business. Whether 2020 is the year you launch your monthly newsletter, start a blog, move over to a more sophisticated invoicing system or expand your team, there are a bunch of useful online platforms available to help you get there. 

Get serious about marketing

If you own a business in 2020 there are countless ways to advertise your business and connect with customers online. While it can get a little technical, there are a few really easy ways for you to utilize social media and run simple marketing campaigns yourself – with minimal cost and effort. Get clued up on how you can use social media to market your business, or look out for free online courses like this one from Google that can take you through how digital marketing works through a series of online tutorials and video guides. 

Make health a priority

When was your last check up? We’re not talking cholesterol or BMI, we’re talking about your business health. Now might be the time to start thinking about where your business is at in terms of generating steady income, ensuring you have a good cash flow and managing your stock levels. Go through our business health checklist to see where there are areas you can improve on in 2020. 

Be SMART

Having goals is one thing, but without a plan they’re just thoughts that are easily shuffled over onto next month’s (or next year’s) to-do list. So be SMART about your goals which means making sure they are: 

  • Specific: Get real, get detailed and set specific objectives you want to achieve.
  • Measurable: Assess where you’re at right now, and find a way to use the data you have at your disposal to measure your progress. That could be increasing your Facebook page likes, working out cost reduction percentages or an increase in the number of your customers or newsletter subscribers.  
  • Achievable: We’d all like to give Elon Musk a run for his money in 2020, but having super unrealistic goals could end up demotivating you. Be ambitious, but realistic. 
  • Relevant: Whatever your broader business objectives are, your goals need to speak to them, otherwise what’s the point right? 
  • Time-Bound: Give yourself a set time period to do the things you want to do. This puts a little bit more pressure on you to not let things that you’ve deemed really important, slip to the bottom of the pile. Check in with where you’re at regularly to ensure you keep your eye on the prize.