Accessing vital small business funding during tough economic times is possible
Article by Vodacom World
The South African business sector is set to come under severe pressure in the current economic environment. Business owners that have been operating the companies for the last five years, have already had to show resilience as they have been working with minimal budgets, limited access to credit as well as local and international economic challenges beyond their control. At times like these, access to funding becomes important to the longevity and success of a growing business.
A recent Finfind survey shows that a significant SMME credit gap exists in South Africa – estimated to be between R86 billion to R346 billion. Many of these companies are unable to meet the strict banking requirements to access credit. Complicated forms, long approval times and the high cost of credit doesn’t work in favour of these small businesses. As a result, the business owners experience is often troubled by unnecessary and avoidable challenges and obstacles.
Mariam Cassim, Chief Officer of Vodacom Financial Services says, “We recognise the financial challenges that SMEs face in the current economy as it relates to access to funding and the ability to receive cashless payments in an affordable way. This is why Vodacom Financial Services introduced VodaLend which is a disruptive SME business funding product, where applicants can apply online and have an answer within 4 hours. It’s quick, easy and not limited to Vodacom customers.”
Quintin Van Vuuren, Executive Head of VodaLend at Vodacom Financial Services says, “Business owners know how to conduct their trade, produce and sell products and deliver services. However, many struggle to navigate the complex financial environment in which their businesses operate. They need assistance with financial literacy, financial planning and effective money management.”
The wasted effort in approaching the wrong funders or submitting incorrect information can be spent on more productive activities. That’s why organisations that fund small businesses must make the application and approval process less complicated, quick and tailored to the company’s needs.
Van Vuuren explains, “The under-serviced small business market is full of potential and allows innovative funders, who are able to tailor business-specific solutions, to help these companies reach their full potential. Easy online applications, faster turn-around times on application approvals and the ability for the business owner to access the cash quickly, are just some of the areas in which digital funding institutions need to focus. It is also important to consider the real value-added services offered such as free legal cover with the funding.”
VodaLend: SME Funding Requirements
- Business must be based and registered in South Africa (Company and/or VAT registered)
- It needs to make at least R500 000 in revenue a year
- You must have been operating for at least 12 months
- Your business and its directors need to have a good credit record
The reality is that fintech solutions are well positioned to step in and provide funding to this sector of the market, especially now that small business are coming under immense pressure off the back off the impact of Covid-19. VodaLend for example has the ability to process many multiple funding applications at reduced transactional costs and introduce an innovative repayment method. This gives small businesses access to a convenient funding partner that supports the future of their growing business.
Unlocking economic opportunities that will drive inclusive economic growth and sustainable employment, particularly for small businesses in South Africa, is a commitment that Vodacom Financial Services is passionate about. This commitment has seen VodaLend play an integral role in implementing customised funding solutions to support South African small businesses.
Resource: NSBC Africa