How to choose the right SME funding partner
South African SMEs often struggle to secure funding for their initiatives because their business models are frequently unique and require specific considerations.
However, there are a few key steps an SME can take to improve its chances of securing funding, even if its business plan is very niche.
A key consideration is finding the right funding partner, which can be a challenging task.
We have outlined a few key steps that SMEs can take to improve their chances of securing funding below.
Needs assessment
The first step in securing funding is to comprehensively assess your SME’s needs and determine the precise amount of capital required to meet these requirements.
This should consider factors such as whether your SME requires short-term or long-term funding, whether the funding is for permanent installations – such as solar panels – or purchasing stock, and whether the funding will be a one-off investment or an ongoing requirement.
Once you’ve nailed down the specifics of what you need funding for and how much you require, it is time to approach the right funding partner.
Applying for funding
Ideally, an SME seeking funding should apply to providers that have specifically tailored their offerings for SMEs.
You should also research what each potential funder requires from you to ensure your application is not thrown out immediately.
GENFIN, for instance, requires that applying SMEs have an annual turnover of over R1 million in the last 12 months, and the SME must also provide its bank statements for the same period.
The SME must also have had a consistent management structure in place for at least six months, and the company itself must have been fully operational for at least a year.
Depending on the loan type, GENFIN may also request your latest management accounts, annual financial statements, and SARS Statement of Account.
Meeting these requirements will drastically improve the chances of securing funding.
Advantages of SME funders
Choosing a funder that specialises in SMEs – like GENFIN – offers a huge range of benefits for small and medium enterprises.
This is thanks to the funding provider tailoring its products to meet the needs of SMEs and providing greater flexibility and affordability.
GENFIN, in particular, has refined its offering with the goal of supporting SME businesses with flexible business funding solutions that meet the SME at its biggest needs.
SMEs that choose to secure funding from companies such as GENFIN therefore stand a much better chance of finding success – not only in terms of receiving funding, but also receiving support after the fact.
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