How Lulalend plans to use its latest round of funding to help South African SMEs

How Lulalend plans to use its latest round of funding to help South African SMEs

We’re excited to have completed our recent round of funding with IFC and Quona Capital, and are committed to using the funds to help support and grow  SMEs across South Africa via quick and easy access to financing.

Eradicating the challenge of access to capital

We know that access to finance is the single biggest challenge for small business owners.

That’s why we’ll continue to invest in technology to improve our customer experience & increase the speed of our lending decision making –  allowing us to offer even faster and easier access to finance.

“We want to be part of the solution that breaks the cycle of limited access to finance. SMEs should be able to grow and expand without the worry of where and how they are going to get the finances they need to seize new opportunities. This is possible through technology and the right mindset of wanting to help these businesses.” Trevor Gosling, Lulalend co-founder and CEO

Growing our loan book and increasing our lending opportunities is another focus area that the new round of funding has made possible for Lulalend. Being able to offer larger loan sizes to businesses whose affordability allows them to qualify for up to R1 million is part of where we are placing the funds we’ve raised. Over and above this we want to see more businesses taking advantage of our credit facility, so that they can draw down from their funds without the hassle of applying every time they need access.

 

Building on the success achieved so far

Lulalend has already assisted thousands of businesses in South Africa, across all industries, with immediate access to business funding. We’ve been able to put the control back into the hands of business owners by allowing them to use the funding for their specific needs. 

As a result, business owner Noel Ehrenreich from New Earth Recycling has been able to purchase raw materials which allowed him to take advantage of new opportunities.

 

 

Mondisa, founder of The Kids Cooking Club, was also able to get funding so she could she could expand into larger premises business. Without the funds Mondisa would have had to keep turning away new business.

 

 

We want to keep contributing to the success of businesses like these because we believe they are the backbone of the South African economy. We’re looking forward to using our latest round of funding to do just this! We can’t wait to add and highlight more success stories like these. This is what drives us to keep working hard, day in day out, to make the challenge of access to finance a thing of the past.

 

 

The unforeseen costs of long term loans

The unforeseen costs of long term loans

As you look for business funding you may come across various options for a term loan. Simply put a term loan is a sum of capital that is borrowed and is paid back over time with interest.  

The length of the loan term can differ depending on the financial institution you approach. The length of the loan and the interest rate can have a large impact on the total amount you pay back, so it’s important to shop around and make sure it’s right for your business needs. While lower repayments over longer term loans might seem enticing, they may cost you more in the long run so it’s worth doing a thorough comparison.

Does the term length really have such a big impact?

Doing your due diligence is important. It helps to ensure that you can afford the loan repayments , but will also provide clarity over the total cost of the loan over time. Shorter term loans might require higher monthly repayments but could save you a significant amount in interest costs when compared to a 36 or 48 month loan term. Some business lenders like Lulalend even allow for early settlement without any penalty fees – offering you another opportunity to save money.

Below is a basic example of how the term of the loan can impact the repayments and total cost, and what you need to be mindful of.

The differences between short term vs. long term loans

What questions are important to ask?

Here are some important questions you should be asking yourself when looking for business funding:

  1. What are the interest rates? This will affect your monthly repayments and the total amount repaid
  2. What kind of flexibility is there with repayments – is it a monthly repayment or can it be split into bi-weekly payments?
  3. What type of financing is it – there are various types of financing and they each come with their own advantages and disadvantages?
  4. Are there additional fees?ost financial institutes will ask for admin fees, late payment fees or early settlement fees that are added extras.

Find out how short term business funding with Lulalend can give you quick, immediate access to funding that is paid back over 6 – 12 months.Our higher approval rates, versus traditional lenders, for SME’s improve your chances of accessing funding that will not require you to provide high value collateral. With no hidden or early settlement fees you will also be able to reduce the overall cost of the loan compared to other lenders.

Election finished. How do we now move forward with confidence?

Election finished. How do we now move forward with confidence?

The 2019 election results are in! They may have left you encouraged or disheartened, but as a nation we now need to look forward to the future together and hold the government to their promises of bringing about the economic growth and stability we need.

Most economists agree the 2019 election outcome will have significant impact on our long term economic prospects as South Africa continues to walk a tightrope around it’s credit rating status. In the short term though, Senior Economist at the Bureau for Economic Research at the University of Stellenbosch, Hugo Pienaar, believes things are looking up for our economy. Financial institutions are becoming more willing to extend credit and we are seeing a greater focus on building the confidence of foreign investors.

As we settle into the reality of the 2019 election results it’s also important for South Africans to try and build their own confidence in the economy to increase our chances of achieving increased growth and prosperity for all. Much of this confidence can come from the growth and stability of our SME’s, and the fostering of a strong entrepreneurial spirit. Our country is made up of more than just a ruling party. It is made up of millions of individuals that are innovators, forward thinkers and inclusionists, seeking to be the solution and not the problem.

At Lulalend we believe that offering fast and easy access to funding for smaller businesses is a critical factor in helping SMEs maximise their contribution to our economic growth. And according to a recent article in the Business Report, we are not alone. Here are the most common initiatives businesses believe would help instil confidence in the economy and what the elected government should focus on:

Support for the development of small businesses

While there has been some recent progress on this front through the introduction of the Department of Small Business Development 5 years ago, it is widely believed there is still much more to be done in developing  support structures that include financial support, mentorship and access to markets.

Skills development

People want to see tertiary education providing a platform for the development of future skills that can meet the demands of the job market.

Tax incentives and prompt invoice payments

One of the biggest struggles for business owners is cash flow. There is a continued desire for the government to offer small business tax relief that is tangible, as well as more stringent policies and accountability around the 30-day payment rule.

Transformation

Across the board there is a hope that transformation will positively infiltrate all corners of South Africa. This can only come from an inclusive mindset that allows, and provides for, opportunities of fairer education, skills development, entrepreneurship and job creation for all.

Being part of the solution isn’t easy. It is a tireless and continued effort to help everyone move forward. But, it is brave and admirable and what we need above all else.

How are you going to be part of the solution in 2019 and beyond?

 

3 impacts the upcoming elections will have on SMEs

3 impacts the upcoming elections will have on SMEs

The national and municipal elections are around the corner and, as always, are a testament to the democratic transition that South Africa has been through.

It’s not clear what the outcome will be and what the future holds for South Africa as the country takes to the polls on May 8th. What we do know though is that the elections will have an impact, be it positive or negative, on the economy. And that this will have a ripple effect on individuals as well as local businesses.

According to a recent survey conducted by Business Partners around the up-coming elections, 40% of SMEs are expecting the elections to have a positive impact, 35% are uncertain and 25% believe the market will be impacted negatively.

The survey also goes on to show that SME business owners believe that the greatest challenge they expect to face in the next 6 months is cash flow, something that is negatively impacted by a volatile environment with fluctuating operating costs.

Here are a few commonly cited reasons why the up-coming elections are causing business owners anxiety:

 

  • Customer confidence

Customer confidence can take a knock around election time. Based on previous general elections you can expect customer confidence to drop off as we get closer to the 8th of May. Most people pull back on spending and delay their buying decisions until after it’s over. It can take a month or two for the dust to settle and things to fully recover and go back to normal – depending on the results.

 

  • Currency fluctuation

The uncertainty leading up to the elections has an impact on the value of the Rand. This can lead to increasing; prices of goods sourced from overseas, petrol prices and inflation. The particular struggle for SMEs is that they can’t fix their prices, as can larger businesses, without taking too much off their margin.

 

  • Marketing plans

Events like national elections have the media’s full attention for weeks, if not months, both before and after the day is over. This means less airtime, advertising space and overall marketing opportunities for SMEs as the media channels become saturated and prohibitively expensive. As a result SMEs are forced to delay, or drop altogether, vital marketing activities.

The knock on effect of these, and other, trends is often reduced revenue and lower profits – putting SMEs across industries under pressure. On top of this the usual winter seasonality means the next few months can be slower than usual for a range of industries.  Financial support can come in handy with all the on-goings about to take place.

With all this uncertainty, preparation is key. This is why Lulalend is the trusted alternative lender for; Working capital finance, inventory or equipment purchases and bridging finance. We’re here to help, especially if and when new business opportunities come knocking. Get the funding you need, when you need it!

Although you don’t have control over the election and its impact on the economy, one thing you can control is your business finance options. Let Lulalend help you grow and succeed. Find out more about our quick, easy application process so that we can help you when you need it most.

 

Most successful business owners have this in common

Most successful business owners have this in common

Success isn’t measured by how much you make, there is a lot more involved in the equation. Some of the most successful business personas failed to make money in their first few years, many struggled throughout their venture. The odd few landed with their bum in the butter, but for the most part it takes blood, sweat, and tears.

According to studies and interviews of some of the most successful people in business like Mark Zuckerberg, Richard Branson, Sheryl Sandberg, and Jeff Bezos all have several things in common. Whether this is what makes them successful or not is up to you to determine, but it’s worth thinking about.

Maybe you want to audit your own success and see if you can put any of these into practice and adopt these guidelines for your business.

 

Successful business owners are:

 

  • Process orientated

These heavy-weights understand efficiency and the necessary processes that not only influence output but also the work environment and the company culture. They put processes in place to help establish, grow and develop the business.

Internal processes that work smoothly and help with communication make for a better work environment where everyone is onboard and knows their role in the business and how it fits into the overall operations.

Processes involved in customer service and product development are also a high priority, after all the customer is who supports your business at the end of the day.

Successful business owners are always looking to improve processes and look for opportunities to make things more efficient.

 

  • Self-reflective

They are not afraid of criticism. They reflect on themselves and the business; regularly and vigorously auditing both. It’s no use thinking you have all the answers and can go it alone. Reflection requires input and an objective opinion. Having mentors and other people speak into the business, and reflecting on successes and failures allows for the kind of reflection that looks to solve and improve.

Successful business owners don’t like blind spots, they want to be aware of their weaknesses and strengths and how their specific skills can contribute to the business. Being open to criticism makes them humble, teachable and allows them to constantly move forward.

 

  • Fail courageously

Entrepreneurs and business owners are known for being gutsy. They are the risk takers and the go-getters. And it’s not because they are naïve to failure and bumps in the road but because they don’t worry so much about it. They don’t avoid failure, they embrace it and see it as part of the journey.

Successful business owners expect failure and prepare for it. They know it’s going to come but they aren’t complacent about it. They learn from it, hurt from it and move on. They carry courage on their side and keep moving forward, finding solutions for short-comings.

 

  • Find an audience to serve

There is a clear knowledge of who their products and services can help. They understand their audience inside out, with a deep understanding of their biggest challenges and pain points. After all, they seek to solve those problems and provide the best solution.

Successful business owners are like ‘business psychologists’. They have understood their audience and have set out to serve them in the best way possible.

Success doesn’t always roar. Sometimes it is the quiet voice, and effort, at the end of the day that says, ‘I will try again tomorrow’.  Don’t measure your success purely by the amount of money in the business bank account, or the size of your business. Measure it by how you develop as an individual, by your capacity to be courageous, and your attitude towards your customers.

 

What SMEs can do to prepare for more power outages

What SMEs can do to prepare for more power outages

On a whole we know the country is taking a hit with the load-shedding, but SMEs are being hit particularly hard. Rolling blackouts are affecting operations for as many as 4 hours a week, cutting the work day in half. No industry is excluded from the knock-on affect their business is experiencing.

The reduction of electricity may cost the country as much as R5 billion a day, according to the Organization Undoing Tax Abuse, a civil-society group.

 

What the repercussions look like on a daily basis

 

Shopkeepers and those in the food and beverages industry, like restaurants,experience walkout when customers aren’t able to get what they want. They are also losing stock – particularly wastage from perishables.

Manufacturers have to down tools altogether as machinery dependent on a power source shuts down and delay orders. Staff that are paid by the hour are also affected as their hours are cut in half.

Professional Services and Technology company’s…. need we say more. The interruptions in communication amongst teams, the inability for stakeholders to access systems, and the financial and accounting bottle neck start to take a toll.

 

Workarounds that might ease the pain a little

 

Sadly we’re can’t control the inevitable and need to start looking at workarounds to lessen the impact if possible. It might be worth getting your team together and brainstorming a couple of your own suggestions that are applicable to your own business. We’ve started you off with some suggestions below.

1. Download apps like Eskomsepush to make yourself aware of the load-shedding times in your area and communicate this with your team. Structure your workdays to tackle the important tasks in those times. This means being mindful of what needs urgent doing and what operations are vital for the business.

2. Breakup the workload. If you only have a limited number of hours a day – spread the important tasks across team members so that they get accomplished in time before any downtime.

3. Identify which tasks can be done with your mobile device when all other systems are down. For example, phone and email communication can be done via your mobile device when there is load-shedding. Though your data costs might be higher than usual at least you’re able to stay in touch with suppliers, customers and stakeholders.

4. This may seem obvious, but charge your technology while you have power. Many people can still do offline tasks when internet connectivity is down. Power up so that you can still continue with work like reporting, design work, and presentations.

5. Consider investing in a generator. It’s difficult to say how long these troubles will continue and it might call for placing some of your budget on something that can keep you online, refrigerate stock and keep the doors open for customers. If it’s difficult to find the extra cash, consider a bridging loan with Lulalend – it’s an 8-minute application and you get paid out in 24 hours.

6. Backup all systems. It’s easy to lose documentation and vital information if it’s not saved and backed up in time. Load-shedding can also cause hardware issues and surges so make use the cloud and keep everything safe and accessible.

 

If you have any other suggestions about how businesses like yours can find solutions while the government tries to find the answers they need to know. If we help each other we can be part of the solution – we just need to think out of the box and keep a positive outlook.