With every business funding application we receive, our Funding Specialists (supported by our AI-driven technology) work tirelessly to thoroughly vet, approve and then disburse the required funds in the quickest time possible. We do this so that businesses can take up new opportunities as soon as they arise.
So, if business owners share their experience with us (good and not so good), we take it seriously. When Andrew Dalrymple, Director at Risk X Data Assurance, shared his story with us, we knew we had to share it. His experience marked a true representation of how Lulalend aims to assist SMEs across SA to continue growing and succeeding at every turn.
Risk X is an SME offering high-end information security audit, advisory, and assurance services to government and private sector clients across a wide range of business verticals. Favourable market conditions presented us with a variety of growth opportunities but as a young business, we did not have the capital reserves to fund this growth internally. After being turned down by the traditional banking sector, we approached Lulalend who provided the funding we needed to take our business to the next level.
How has Lulalend helped your business thus far?
We have accessed two tranches of funding from Lulalend and consequently have been able to grow our business throughout the Covid pandemic, with the certainty that we will be able to meet our short-term cash flow commitments without having to compromise the quality of our long-term strategic decision making and client relationships. Lulalend may not be a long-term capital solution, but they can be an absolute lifesaver as a short-term cash flow supplement, and certainly were in our case.
Would you recommend Lulalend to other SME business owners?
I would absolutely recommend Lulalend to any SME who has been let down by the formal banking sector and needs working capital to fund growth in their business. They have a transparent model and a highly ethical approach to lending and take a personal interest in the success of your business. Our experience with them has been exceptional.
“Lulalend saw the potential of our business when other lenders did not and supported us with the cash flow we needed to scale up at a critical stage of our company’s growth. Their lending model and willingness to commit to South African SME’s is a critical enabler for many businesses like ours and the economy as a whole. Lulalend has been ethical and upfront in all of their dealings with us and the level of interest and concern for our progress that Lené has shown throughout goes beyond the purely commercial nature of the relationship. I would recommend Lulalend to any SME that needs short-term cash flow support.” – Andrew Dalrymple.
We hope that when your business requires a cash injection, you’ll always think of your friends in funding first.
And if you’re in the market for this form of business funding, you have a few options available to you.
The best type of equipment finance for your business depends on your exact needs.
As part of our Open for Business campaign, we created this blog post to answer your questions about equipment finance and business funding.
In this article, we turn to Lulalend’s business funding specialists to learn more about:
How equipment finance works
What to consider when applying for equipment finance
What is equipment finance?
Equipment finance is also known as asset finance. It’s a type of business funding that lets you generate more income for your SME.
And it doesn’t matter which industry you’re in, you’d be able to think of a piece of equipment you could use to grow.
As a manufacturing SME, you could use new equipment for your production line. A mining business might benefit from opencast mining equipment. And SMEs providing professional services could purchase upgraded computer hardware.
So, it’s no surprise this FinFind SMME finance study found equipment was one of the key reasons South African businesses needed business funding.
When you take out equipment finance, you don’t place strain on your cashflow. The alternative is to spend years saving the capital you need to buy the equipment outright, although this approach could result in missed opportunities for your business.
But, how does equipment finance work, exactly?
How does equipment finance work?
There are a few general ways you can structure your equipment finance.
Each of these options presents different implications for your SME’s tax calculations and balance sheet. Explore each one carefully before making a decision.
In some cases, the funder will own the equipment, and you’ll rent it from them over a specific time period.
Now, maybe you only need a piece of heavy-duty machinery for one job. In that case, this short-term option makes sense for your SME.
Equipment rentals, however, aren’t the best choice for all businesses.
One disadvantage of equipment rental finance is that terminating your contract early can be expensive, according to this article in Funding Hub.
Heidi Alson, the business funding specialist at Lulalend, said getting finance to buy the asset might be a better fit for some SMEs.
“Instead of paying fees to rent equipment, apply with a lender like Lulalend and own the asset.”
And because alternative funders like Lulalend offer unrestricted finance, you have the freedom to choose how you spend the funds.
“Lulalend’s funding is for any business need, so you’ll be able to buy the equipment from your supplier, according to your terms. We know business owners know their businesses best,” said Alson.
Some funders will let you finance the purchase of the equipment.
You’ll repay the equipment finance over a set period of time in monthly installments. Depending on the structure of the business funding, you might need to put down a deposit.
For some equipment financing, you may need to give security. That means the lender might take the equipment as collateral. Or, you might need to attach a personal asset as security.
If you default on your loan, you are giving the lender permission to possess these assets. Review this carefully. On top of that risk, many small business owners often don’t have sufficient assets to put down as collateral.
Business funding for equipment finance
When will you get a return on the equipment you buy?
It depends, said Kaushik Fakir, Lulalend business funding specialist.
“Investing in equipment finance might only pay off months after taking out funding for some businesses. They’ll need to buy the equipment and then look to grow their business using the assets. For others, it’s immediate because they can expand their offering right away.:
For many business owners, fast business funding would be a better pick, added Fakir.
“With Lulalend, you get funding now and only start paying it back after a month.”
Looking for fast business funding?
If you are looking for equipment finance, here are some points to consider:
Watch out for early repayment penalties. Some funders will charge you for settling your equipment finance loan early
Study the business agreement for any hidden costs. Do you need to pay monthly account fees or credit insurance?
Finding the right equipment finance for your SME can set your business up for success.
Unsecured business funding from Lulalend might be the right match for your business if you need access to funding fast.
A new countrywide SME support campaign will offer small businesses free marketing exposure, financial management tools, and support to digitally transform their business as they attempt to re-open following the COVID-19 pandemic lockdown.
As a growing number of small businesses begin to shift online to meet changing customer behaviour resulting from COVID-19, Lulalend, SA’s first online funder for SMEs, has launched its Open for Business campaign.
The campaign will provide:
Marketing support: including exposure across Lulalend’s high profile digital platforms
Digital capability assessment: free audit by Lulalend’s digital marketing experts
Access to cash flow forecasting tools: a snapshot of an SME’s short-term financial future
Mentorship: connect over lunch with an inspiring mentor from your industry
The free marketing support will promote SMEs on Lulalend’s blog to help increase their exposure and improve vital search engine rankings. Businesses will also be promoted across Lulalend’s social media platforms under the Open for Business banner.
The campaign comes as internet traffic has continued to rise by 15% since President Cyril Ramaphohsa announced the lockdown in March, according to Seacom, the network service provider. These increases have included hikes in video consumption and standard web browsing.
A study from Nielsen also showed 29% of people were shopping more online since the start of the outbreak.
Michael Rampjapedi, digital marketing manager at Lulalend, said SMEs featured on Lulalend’s blog will be able to grow traffic to their sites.
“The most important benefit is the visibility, especially for a new site. You’re getting free traffic to your site. And that’s immediate, cost-effective, exposure.”
Rampjapedi said there will also be long-term benefits for a business’ search engine ranking.
Linking to the Lulalend site improves a new site’s domain authority: a group of factors that influence a site’s ranking.
“The Lulalend blog’s domain authority is similar to that of the banks. So, having those kinds of associating links is beneficial for a new site’s authority,” said Michael Rampjapedi.
Meanwhile, Lulalend’s cash flow forecasting tool will allow an SME to view a monthly breakdown of it’s expected turnover and estimated expenses for the next six months.
The Open for Business campaign will also be regularly providing valuable content to help businesses operate effectively during the pandemic, such as this Back to Business guide.
The guide, which was produced in partnership with the National Small Business Chamber, covers topics including:
Marketing your SME during COVID-19
Increasing your cashflow
Communicating with your team
Within Lulalend’s SME community there have been many stories of entrepreneurs adapting their businesses overnight and finding new ways of doing things to cope with the impact of COVID-19. Lulalend is offering business owners the chance to meet and learn from these inspiring individuals.
Our “SME Load shedding Task Force” has been set up to prioritise applications and provide an almost instant response to businesses in crisis due to load shedding. Many small businesses do not have the necessary backing to survive such interruptions. We’re stepping in where traditional banks are failing to come to the rescue of small businesses in need of emergency financial assistance.
Under normal circumstances, funding applications are processed within 24 hours. The emergency task force will however fast-track the process further for businesses that are severely affected by Eskom’s power interruptions.
This worrying trend, and Eskom’s announcement this week that South Africans should brace for at least two more years of intermittent load shedding, prompted the creation of the special emergency response task force.
“By setting up our emergency response task force, we are now able to prioritise any applications when the applicant tells us it’s load shedding-related,” says Lulalend CEO Trevor Gosling.
Load shedding survival tips for small businesses
Small businessesneed to start looking at workarounds to lessen the impact of load shedding. Gosling says there are a number of things that small businesses can do in the interim to mitigate the fallout from load shedding:
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.
Break up 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.
Invest in surge protectors for your appliances, machinery and hardware. Small surge protectors that are sold in the supermarket will do the trick to keep your PC, fridge, coffee machine and other small appliances from blowing when the power surges back after load shedding. For industrial-size equipment, it’s best to get advice from a trustworthy electrician.
If you run a shop, invest in a mobile or battery-powered point of sale solution so that you can continue to accept card payments when the power is off.
Invest in solar power banks or car chargers for your mobile devices.
Identify which tasks can be done with your mobile device when all other systems are down, such as phone and email communication. Though your data costs might be higher than usual at least you’re able to stay in touch with suppliers, customers and stakeholders.
This may seem obvious, but charge your technology while you have power.
Change your online settings to enable you to work offline. If, for example, you work with Google Docs, see Chrome’s instructions on how to set yourself up to work offline.
Backup all systems and important – on the cloud and on an external harddrive. It’s easy to lose documentation and vital information if it’s not saved and backed up in time.
Consider investing in a generator. If it’s difficult to find the extra cash, talk to Lulalend about bridging finance.
While some industries are able to wind down towards the end of the year, others have a final sprint to the finish. Running a business can be a 365 day a year commitment, which is why it’s important to recharge, disconnect and allow yourself some time offline. A quick escape to one of these South African destinations where wifi is scarce and nature is abundant might just do the trick. Here are five local getaways that will allow you to switch off from the hustle and spend some well needed time with family or friends.
You don’t need wifi if you’re staying in a forest cabin. You’ll be so busy braaing or looking out across a canopy of trees at Kurisa Moya, you’ll forget you even have a Facebook account.
Only accessible by 4 x 4, eco-lodge Rockwood Cottage is a tranquil hideaway in the Karkloof Nature Reserve which is in the Northern Midlands area of KZN. If solar powered simplicity is what you’re after, this is the place.
Nestled among mountains, orange sunsets and rooibos farms there are plenty of quaint and quiet spots to explore in the Northern Cape.You’ll need to wind your way through mountain passes to get to Gifberg Holiday Farm, while Verbe Farm is another great spot just a few kilometers off of the N7.