Any given day in South Africa can, out of nowhere, feel like doomsday for small businesses. Like when the floods in Joburg turn your delivery vehicles into flotation devices. Or Eskom’s stage 8 load shedding schedule transforms your restaurant into more of a blind tasting experience for your patrons. Forget about the weather and the damp coal for a minute and think about all of the unknowns you face as an SME wanting to expand your business… it’s a mixed bag of expenses and possibilities. Our credit facility has proven to be the perfect fit for businesses in this stage of their journey (and a few who’ve needed generators in a hurry).
“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,” says Business Funding Specialist Tracy Kukard. “Like a security company who gets a contract for a new site and needs to quickly bring on new staff, new uniforms and new vehicles to service it. Those upfront costs are high, but will be paid back quickly once their contract kicks off. Having a credit facility means they can create the capacity for new business and save on time and costs because they don’t have to apply for new funding each time they need it, and they only pay for the amount they use.”
Lulalend’s credit facility has proven to be really useful to business owners across a number of industries. “From guesthouse owners to dentists; internet service providers and online stores – having that kind of access to funds has helped so many SMEs in our community,” says Business Funding Specialist Lene Schlebusch-Kemp. “And 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.”
Another flexi-perk about a credit facility is that it offers you the ability to only pay for what you use. If, for example, you access a R300 000 credit facility over a period of 6 months, and you only draw down (Lula speak for make use of) R100 000, your bimonthly costs would be roughly R2000. That’s a rough estimate based on average risk scores, as each company is assessed individually and has a unique cost structure. Unlike traditional lenders, we don’t charge an initiation, admin or credit life fee or any penalty fees if you are able to settle your account early.
How to apply for a Credit Facility
If you’ve taken out funding from Lulalend previously, you’re one step ahead. Having your financial information already linked makes the process of assessing your eligibility for our credit facility even faster.
Contact email@example.com and one of our funding specialists will get in touch to chat you through an application.
Who can apply for a credit Facility
This is the part where we let you know that we are proud of being responsible lenders, which is why we have minimum requirements in place and why each company would need to be individually assessed in order to see if they qualify for our credit facility.
How soon can you access the credit facility?
Once you’ve completed your profile, which includes making sure your financial information is complete, it’s all systems go. You can have access to a credit facility in a matter of hours.
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 just a few minutes:
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.
In our ongoing efforts to be as transparent as possible, we’re choosing some of the questions asked by customers and expanding on them here in our blog. Today’s focus: how our funding differs from a short-term loan. (more…)
According to SME South Africa, 47% of South African small business owners are women. That’s a 6% increase in the female to male entrepreneur ratio. We know that SMEs are a major driver of job creation, so on paper, the future certainly looks bright.
That’s until you factor in that 70% of new businesses fail within the first 18 months. It’s clear that access to funding for women’s business remains a big challenge.
According to one survey, 88% of small businesses are self-funded, have never applied for funding and don’t actually know where to apply for funding. Plus, most claim access to finance is their number one challenge.
So what can be done to support female business owners in South Africa? The answer seems remarkably simple. Funding. More specifically, it’s access to the right information that empowers female business owners to make informed financial decisions.
We’ve put together this handy guide to help you understand how funding can be used to help your business grow.
Challenges Affecting Female SMEs
There is nothing more satisfying than running your own business. But being your own boss does come with its own challenges.
The main business challenges faced by SMEs are:
Access to finance and credit
Cash flow management
Access to support
High startup failure rate
Access to markets
Business funding exists to help deal with some of these challenges. As an entrepreneur and business owner, you need to understand the unique challenges that face your business and determine what kind of business funding can help you overcome them.
Clearing The Fog Around Business Finance
Financial literacy and easy access to information about business funding is key to solving many of the challenges facing your business. You need to know how to plan, budget, invest and have a working understanding of the financial health of your business.
It’s also important to know that applying for business finance is not an indication that your business is struggling. Most, if not all, businesses that have been operating for some time need capital in order to scale.
Funding For Women’s Business In South Africa
In the past, SMEs had to rely on banks to provide a range of financial services, but because of restrictions and tough requirements, actually walking away with the funding needed was difficult. Now there is a range of alternative lending options for SMEs, each with their own pros and cons.
Some forms of finance like bootstrapping, angel investors, venture capitalists, crowdfunding and accelerator programs are only applicable to new businesses and startups.
For existing businesses, funding options include secured and unsecured loans, bank finance and government grants. Funding intended for a specific purpose, such as a bridging loan or purchasing equipment, carry their own minimum requirements.
Alternative lenders have proven a popular and more flexible option for South African SMEs looking for easy access to finance.
Business credit can be a great tool for growing your business and it’s a lot more flexible than a small business loan.
A business credit facility works in the same way as a credit card, which can be a huge advantage for SMEs. It’s always there when you need it, which is great for peace of mind, and means you don’t have to withdraw from your personal funds when you need quick access to working capital.
And the biggest advantage – you only need to apply once.
Using Your Funding
There is a common misconception that only new businesses require funding. The reality is that business funding can be applied for at any stage in a business’s lifespan and can be used to meet many different needs.
Examples of ways you can use your business funding include:
Expansion of your premises
Hiring additional staff
Managing Cash Flow
What you do with your business funding is ultimately up to you. As a business owner, it’s your job to ensure you know exactly what you need funding for and how to use it to achieve your business objectives, whether it’s growth, purchasing seasonal inventory or buying the equipment needed to scale.
As a business owner, you need to understand how your money can work for you. This includes your business debt.
It’s important to understand that there is a difference between good debt and bad debt.
Bad debt does not influence your business growth. In fact, it does the opposite. Drawing on your credit card to cover day-to-day-expenses, luxury items or depreciating assets like a vehicle, counts as bad debt.
Good debt works for your business. Business funding that contributes to the growth of your business or ultimately increases your net worth can be considered good debt.
The Secret To Growing A Successful Business
Accessing finance to grow your business is a big step in the right direction, capitalising on that investment is another smart move. But running a successful business is so much more than maintaining liquidity. It’s about why you decided to do it in the first place.
Research shows that 74% of entrepreneurs start their own businesses because they want to pursue their passion and make a positive impact in South Africa.
We’ve handpicked some inside secrets from successful female SMEs to help you along the path to success:
Tell your brand story in your marketing – it will make customers (and investors) love what you do
Define your values and let them drive your business activities
Connect and engage with your customers and they will return for more
Get tech-savvy and embrace technology
Be a disruptor and show the world what makes you different
Network as much as possible and share your success story
Never sell yourself short – be proud of what you have achieved
Pay it forward and mentor other women business owners like yourself
Grow Your Business With Lulalend
Lulalend is dedicated to helping South African businesses grow and that includes providing access to funding for women’s business.
According to our own market research, 59% of SMEs say access to credit is their biggest business challenge. With Lulalend, you can access up to R1 million in business funding or business credit in as little as 24 hours. Simply apply online and complete our paperless, obligation-free application and we’ll be in touch with your answer.
If you have any questions, get in touch with us today and we’ll help you find the business funding solution that’s the right fit for your business.
South African National Women’s Day celebrates the millions of women who continue to make a difference in our country. We decided to put the female business owner at the forefront this week, to help inspire you on your own road to business success. (more…)
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.