Customer Success Stories

Cape Coffee Beans

About Cape Coffee Beans

Speciality coffee is a constantly growing marketplace. Cape Town has always been one of the cities that has been at the cutting edge of what’s being achieved in this space. However, despite the great interest, most of the country is poorly supplied when it comes to freshly roasted beans. Traditional retailers weren’t able to address this problem. Enter Cape Coffee Beans, who quickly began to meet the need.

With a love for coffee and a wide range of ecommerce skills Phaedon Gourtsoyannis founded Cape Coffee Beans, an online store for South African coffee lovers. Phaedon realized that not everyone across the country had access to local, freshly roasted coffee beans so he created a place where they could have access to everything needed to make great coffee. His online store grew as he realized that his clients not only needed fresh coffee beans but the equipment to make delicious coffee.

The challenge of finding funding to grow

Cape Coffee Beans was 100% bootstrapped. Phaedon used some cash he’d saved from consulting work he was doing at the time to help fund the setup and then it was a case of trying to get into the cash flow positive. Fortunately, he was able to build Cape Coffee Beans while avoiding many of the big setup costs other eCommerce ventures incur. But as things got busier there were a couple of hurdles that came up further down the line.

As the business grew Phaedon knew he had to invest properly in coffee equipment inventory to dispatch orders to customers quicker and provide a better customer experience. He tried to get an overdraft with the bank to make the necessary purchases and gear up for their first festive season. But, because Phaedon is a foreign national and the sole director of Cape Coffee Beans it wasn’t that easy. The sad reality is that traditional lenders (banks) often prevent foreign nationals from enjoying access to credit facilities. Despite a positive credit rating it’s next to impossible to get an overdraft from banks and other traditional lenders if a company’s directors don’t hold a South African ID.

“The challenge for an eCommerce business is that inevitably a certain amount of working capital is tied up in stock. While you can source just in time at a certain scale, eventually holding inventory becomes more important.”

Phaedon Gourtsoyannis

Founder, Cape Coffee Beans

Phaedon was stuck between a rock and a hard place, and then he heard about Lulalend through Payfast, one of Lulalend’s partners. He soon learned that we provide fast access to funding for SMEs and was immediately interested in exploring us as an alternative to an overdraft.

“Lulalend not only made it possible for me to get access to the funding I needed for inventory purchases but their application process was easy and uncomplicated. It is completely online so I could do it from anywhere at any time and it took me no more than 10 minutes. A response to my application was also remarkably quick and I received the funding I needed within 24 hours – that’s unheard of with traditional lenders.” Phaedon Gourtsoyannis, Founder of Cape Coffee Beans

Phaedon’s first credit facility went straight into purchasing inventory, which helped Cape Coffee Beans over a busy December period. Since then Lulalend has become working capital finance for Cape Coffee Beans. The business takes out a new credit agreement at the beginning of each month to ‘refinance’ and uses Lulalend’s funding as an overdraft of sorts. With the successful repayment of each advance Cape Coffee Beans are able to obtain a better funding cost as their credit profile with Lulalend improves.

“What Lulalend has allowed us to do is invest properly in coffee equipment inventory, which allows us to dispatch orders to customers quicker and provide a better customer experience.” Phaedon Gourtsoyannis, Founder of Cape Coffee Beans

Because Lulalend is built on a belief in small businesses we work hard to help empower SMEs like Cape Coffee Beans.

“It has been encouraging to hear from Phaedon that not only did he see an 87% growth year on year since he became a Lulalend customer but because of the blood, sweat and tears that him and his team tirelessly pour into the business they recently saw a record months’ sales at the end of 2016. This is what at Lulalend is all about – helping to grow a sector by facilitating the growth of businesses in that sector.” Trevor Gosling, Founder and CEO of Lulalend

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