When you started your business you might have had a whole team of supporters helping you get to where you are now. Or maybe not, maybe it was 100% hustle that’s earned you the title of CEO, Owner, Founder, or as is the case with a lot of SME owners, ‘A Little Bit of Everything-er’.
We’re proud to say that we’ve been able to offer many businesses the help they need so that they can get back to doing what they do best: running their business. That’s what friends do – they’re there to offer each other support when they need it. Our Friends in Funding competition, which runs until 13 December 2019, is aimed at doing just that.
We’re giving one South African SME the opportunity to breathe a bit, put your name on the map or bring that next big idea to life.
What you use it for doesn’t matter. The bottom line: R500 000 can change everything. See how funding has impacted other South African businesses in our community here.
And we’re giving it away (like for free!) to one small business who completes a funding application with Lulalend before 13 December 2019.
How to enter
Complete a funding application before 13 December 2019.
It takes only minutes and is 100% safe and secure.
I don’t need funding right now – but I know a guy!
Become a Lulalend Affiliate and you’ll earn 3% on the amount of funding received by anyone in your community. And if someone in your network ends up winning the R500 000 – we’ll give you 3% of that too!
After working in a small workshop for many years Frank Naidoo decided he was ready to take the leap and start his own business. He’s the owner of a tyre fitment centre in Johannesburg and has geared himself up for a busy festive season and the Black Friday crowds with R500 000 in funding, ensuring he can meet the surge in stock demand.
We chatted to Frank about some of his biggest learnings over the last seven years, what his new business mantra is, and how Lulalend has been a true Friend in Funding to him when he needed one.
What scared and excited you the most about starting your own business?
When you work for someone else, you know you’re going to get a salary no matter what. When you do your own thing, it doesn’t work like that. You worry about things working out, or if something out of your control could happen in the market that could close you down. But it’s also very empowering to know that you’ve got the freedom to make the choices you want and have control over the direction that your business goes.
What are some of the challenges you face as a South African SME?
As a small business you’re already in a competitive market, but one of the biggest challenges I face is the growing emergence of informal businesses which are taking market share and having a negative impact on the industry. Unlike us, these businesses are not regulated, have little to no overheads like insurance, premises rental or department of labour fees and can thus offer prices that we struggle to compete with.
What makes all the hard work worth it?
The pleasure of running this business is that we get to help people. There’s nothing worse than having your car break down, or needing to replace a tyre. We’re all busy people and all we want is to be able to get back to work or our families. Making that experience easy and fast for our clients and delivering excellent customer service at the same time is what makes me feel good about what I do.
It’s that very same reason that I applied for funding with Lulalend. I found I received the kind of experience to what I try to instill in my own business’s customer service.
What was your funding application experience like?
It was fast and easy and I was kept in the loop every step of the way. While I appreciate the speed that my application was processed, it’s not that I necessarily needed the funding urgently. I just really value the service I received which was ultimately the deciding factor for me. I never felt as though I was just an application; each interaction felt personal and I felt took my unique business needs into consideration. It made me feel really good to know that the time was taken to do the relevant credit assessments and that ultimately, Lulalend had faith in me and my business; enough to give me R500 000. That made me feel really good, and like I was more than just a business transaction.
What did you need the funding for?
It’s Black Friday and festive season coming up and so I wanted to be able to make bulk stock purchases in order to get better prices for my customers. It was about being able to meet the seasonal demand, but to also make sure that we are delivering on the absolute best prices we can for our customers. I needed funding to be able to do that, and I believe it will have a huge impact on sales and the relationships with our customers over the next few months.
What advice do you have to give to other small businesses?
You don’t pay salaries; your customer pays salaries. Customers have so much choice as to where they spend their money, make their experience worth it.
Pay close attention to your overheads. Take the time to find the right pricing on things like premises rentals. And have clear sight of what all of your expenses will be. Often you don’t think to factor things like SARS, health and safety inspections or insurance when you first start out. Those are the things that really add up and over a few months could make your current business model unsustainable if you aren’t careful.
Be on the ball and watch your pennies. Stay involved in your business and your finances so that you can quickly pick up if something doesn’t look right.
Having experienced the funding struggles so many South African business owners do, Lulalend CEO and Entrepreneur Trevor Gosling knew how important it would be to partner with someone who could supercharge the online business funding platform with technology to solve a key issue: speed. When he joined forces with co-founder Neil Welman, whose engineering background has given him a knack for using software to solve problems, the result was a fast and friendly user experience tailored to the needs of busy and underserved entrepreneurs, which was both secure and scalable – the Lulalend platform as you know it today.
Neil’s work never ends and technology is ever-evolving. If he’s not working with our team to add even more robust site features or finding ways to improve and streamline our already airtight processes, there’s a good chance he’s mapping out the next steps in our big picture plans. We did manage to steal a few minutes to pick Neil’s brain on all things fintech, and its ability to break down the barriers to financial inclusivity for South African SMEs.
How do you believe tech has influenced the finance industry over the last 10 years or so?
It has had a major impact on reducing the underbanked sector, and for the consumer it has meant a far better experience in terms of connecting and engaging with financial services.
How does this benefit South African consumers?
It means so much more opportunity. SA has a much higher banked population than the African average and well established credit bureaus, this is a big enabler for a digital financial ecosystem to evolve.
What was the thinking behind creating the tech that powers the Lulalend platform? What were your key objectives in this process?
When we researched the challenges small businesses have with accessing funding we quickly realized that time and cost of an assessment were the main limiting factors. We felt using technology was the way to solve these and so set out to fully digitize and automate the entire experience of accessing funding.
How does Lulalend’s technology support speed, security and the overall experience for our community?
Having all our risk assessment models hosted on our platform allows us to automate the entire process. This eliminates the key operational cost usually associated with assessment, and allows us to offer funding for even relatively small amounts at a lower cost.
What are some of the challenges you’ve faced working on a platform like this?
When you design a platform like this the key goals to achieve are security, performance, scalability, implementing business functionality and ensuring you always have sufficient tech talent to achieve these. Each one will present a challenge at various points along the way but if you keep proactively focusing on each the challenge is always manageable.
How do you see the platform evolving as we grow our community and our offerings?
We plan to become more of an ecosystem to assist small business owners achieve their potential by assisting in all financial areas.
Running a business in South Africa is just not the same as running a business anywhere else in the world. Sure, there are some universal challenges that every business will encounter at some point in their journey, but there’s a reason why the hashtag #onlyinsouthafrica has such a following. We’re unique – in our adversity; in the way we solve problems; and, as we saw in the 2019 Rugby World Cup final, in our victories.
So despite the many challenges that businesses face on a daily basis in our country, we wanted to celebrate a few proud points and inspiring thoughts about being a South African SME:
You want to make a difference
According to a report by SME South Africa, the number one reason given by South African business owners as to why they started their businesses was to have a positive impact in society. The impact of this motivation could create more job opportunities for the millions of South Africans who need them, as well as more businesses which are driven by purpose. Like Recruit My Mom, a platform that helps women find flexi-jobs that fit with their schedules, or Brownies&Downies, a coffee shop that also provides mentorship and training for people with intellectual disabilities – as well as delicious brownies!
You make a plan
Load shedding, water cuts or economic nosedives – you can count on South Africans to make a plan. Having to manage constant variables has become second nature to so many business owners and it’s fostering a nation of highly skilled and agile problem solvers. Lumkani, as an example, is a company that was established out of a need to solve the problem we face with fires in townships. The local company services informal settlements with unique fire detectors and insurance.
You’re empowered by tech
Technology and the age of the internet has been a huge unlock for businesses in terms of access. Even though 50% of South African business owners still feel that technology is holding them back from achieving their growth aspirations in some way, there are so many innovative South African businesses who are harnessing tech to break down barriers and create meaningful services for our communities. Like Namola, an app that allows you to very quickly contact emergency services by sharing your location with them. Livestockwealth has even created a way for people to invest in cows and for farmers to get the investment they need to grow their farms through their platform.
You’re a snapshot of South African diversity
When we interact with our Lulalend community, we’re always inspired by the diversity we see in the businesses and people we are able to support and provide funding to. This ranges from every industry you can think of: tech services to tattoo parlours, butcheries to bedding companies, doctors to DIY building suppliers. Some of the members in our community are only 19 years old, while others are well into their 70’s. Diversity is a measure of strength and a promising forecast of an even more inclusive economy.
We know that speed and efficiency are really important to business owners. In fact it’s become a standard expectation for anyone nowadays to have a slick and easy online experience when they interact with a company or service. That’s how brands like Uber, Netflix or AirBnb have become such a regular part of so many people’s lives. It’s also why cutting edge technology was a huge focus when we built our platform. Today that means we’re able to process funding applications within minutes and deliver approvals within hours.
But there’s another part to this equation that is equally important to us, and that is: people. Running a business is personal. It comes with challenges and a thousand unknown outcomes that can really test you; while also giving you the opportunity for fulfillment and success beyond what you could have ever imagined. When you interact with Lulalend, you can be sure there’s a human taking your unique needs into consideration every step of the way – even if you never actually speak to them. But a lot of the time, you do.
We asked our team to share some of the most common questions they get from small businesses, as well as their responses:
How can I apply?
“You can either apply online, or you can call in and a consultant will help you complete your application. You’ll hear back from us in minutes and can receive funding in hours.”
Xolani Jelemsi, Business Funding Specialist
What is the interest rate you charge?
“Our funding works differently to a traditional bank loan and is not based on an interest rate. Instead, we charge a fixed cost which is based on your overall business health and unique to your business needs; because every business is different.’’
Clayton van Wyk, Business Funding Specialist
Why is my funding quote lower than the amount I requested?
“We’re really proud of being responsible lenders and we do not want your business to be overextended in any way. We want you to be able to comfortably afford the funding. After paying back 50% of your funding you’ll have the option to come back and, depending on the performance of your business, qualify for a re-advance.”
Heidi Alson, Business Funding Specialist
Why are your rates different to a bank’s?
“We aren’t competing with the banks as we offer something completely different – we provide short term funding. Having no penalty fees for settling early means that you only pay for the period you have the advance for. This can mean a huge savings, depending on how early you settle”
What are the benefits of taking short term funding, instead of long term funding?
“Working with a time period of 6 or 12 months means you’re not being tied down to debt for too long. You can access the money you need right now to benefit your business and create opportunities for growth in the long term.”
“Our fixed cost structure means you can forecast your finances without any fluctuations or hidden costs over that period. A lot of business owners really value that transparency.”
Sheldon Fortune, Business Funding Specialist
What is unsecured funding?
“Unsecured funding means that as the lender, we rely on your promise to pay back the amount we approve you for, and we don’t require collateral. You don’t need to include any assets as part of your funding, which the banks would require as a second option should you default on your repayment.”
“Lulalend is a registered business which has been trading for 5 years. We’re a member of The South African SME Finance Association (SASFA), an organisation which encourages transparent and responsible lending to small businesses. We subscribe to a code of conduct that is focussed on protecting SME customers.