Rethinking your funding strategy?

A funder’s perspective

As an entrepreneur, the growth of your business is your main priority.

But when you are trying to drive growth – relying on your own cash flow or family or friends won’t cut it.

From then on, your growth will rely on your funding strategy and your relationship with your funding partners – like banks and alternative funders.

No single funder can meet all your business needs. Different stages and needs require different solutions.

• Click here to learn more about Spartan SME Finance.

Horses for courses

A realistic funding strategy means building a combination of traditional and alternative funders, depending on your context & business needs.

Start by mapping out your requirements: working capital, expansion, specialized equipment, acquiring business premises, acquiring a competitor, etc.

Then, shortlist funding partners that match your context & needs with their offerings.

Don’t waste time applying to a funder where there is no match with their offering & process versus your requirements and timeline.

Do detailed research that goes deeper into your business needs and look for alternative funders who take time to understand your context, in addition to your balance sheet.

In the same way that alternative funders are different to banks – not all alternative funders do the same thing.

Look at loan sizes, terms, funding options and ability to structure funding facilities to your context.

Get your act together

Then comes the next hurdle – applying for funding.

Waiting until the last minute is risky – options shrink. Instead, start early and get the conversation going.

Build relationships with alternative funders who understand your sector, match your needs, and can adapt to your growth plans.

Proactive funding strategy isn’t just smart – it’s a sign of a growth-oriented mindset. Don’t wait for a crunch.

Make sure you are prepared before applying – the issue of funding readiness can become a self-sabotaging hurdle.

Ensure you have your docs in hand [eg: financial statements, management accounts, etc] – all funders can only assess your business with proper information.

Missing this information will delay or prevent the funder’s ability to help you.

Be transparent – they’re lending you money after all

When it comes to financing, expecting things to be easy is unrealistic.

Don’t see your need for funding as a once-off event.

Your funding partners can become strong long-term relationships. And just like any long-term relationship – you need to be open and honest.

Funders often know more than you think they do.

Some alternative funders are focused on small loan sizes, with technology-driven processes – making for a simpler credit process because of their smaller loan sizes.

However, for those alternative funders focused on large loan sizes, for SMEs with a complicated context, requiring customization and structuring – understandably a more involved and rigorous process is required for those large amounts.

This requires a level of transparency on the part of the entrepreneur.

Spartan SME Finance

If you are a growth-obsessed entrepreneur that needs a funding partner that understands you, your business, your context [however complicated] – consider Spartan SME Finance.

Spartan SME Finance offers a structured financing approach with loans from R1 million – R75 million. Established in 1981 – backing entrepreneurs for 44-years.

They have developed an entrepreneur-focused funding process that gets to know your business – then structures finance that fits.

Click here to learn more about Spartan SME Finance.