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Where start-up finance starts

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Many South Africans want to start a business and need to raise finance but are unsure of what funding options are available and what is needed to qualify them. DARLENE MENZIES, CEO of Finfind, offers some suggestions.

Access to business finance is a major challenge for entrepreneurs. The high rate of rejected loans applications and the lack of knowledge about the available offerings are just two of many issues they face.

When it comes to applying for finance, a common mistake entrepreneurs make is where to start. Instead of doing some basic research about the various lenders and finance products available, they usually head for the lenders they know of, typically the commercial banks and government grants. In reality, the banks and government provide less than 10% of the total finance needs in the start-up and small business sector. While these lenders may land up being the right fit for you, if you want to avoid wasting valuable time and money running around applying for finance options you don’t qualify for then it’s important to start with a little research.

As Abraham Lincoln said, if you give me six hours to chop down a tree I’d spend four hours sharpening the axe. It is important to do some prep, to ask yourself some key questions and to arm yourself with the relevant information.  Here are some tips on what to ask yourself and where to easily find the answers to help you secure a lender for your specific needs.

What do you need finance for? 

Be clear about what you need finance for in order to determine which lenders you should be approaching. Just as there are different reasons for raising finance, there are equally many different types of lenders and different types of finance products to match these needs. There are specific products to finance the buying of equipment and machinery, for working capital, for completing a contract, expanding your business, buying a building for your business, to buy out a partner, to buy a franchise, for exporting or importing, for a business emergency among others.

Data shows that the most common reason why entrepreneurs want to access finance is to start a business. The top three reasons why existing businesses apply for raising finance are to purchase equipment, to expand their businesses and for working capital. The good news is that there are more than 50 funds in South Africa for start-up finance and more than 70 funds available to fund the purchase of equipment.

What are the different types of finance products 

Once you are clear about what you need finance for, you can familiarise yourself with the different types of finance products available. Some of the types of finance include Asset Finance, Bootstrapping, Contract Finance, Customer Deposits, Equity, Export Finance, Import Finance, Invoice Discounting and Factoring, Mortgage Loans, Overdrafts, Property Finance, Supplier Finance and Term Loans. Decide which products fit your need and then research all you are able to, find out which lenders offer them and what you need to qualify for them.

Who are the lenders? 

When it comes to start-up funding, surprisingly, or maybe not so to anyone who has tried to access finance, more than 60% of all capital raised comes from the entrepreneur’s own savings or from loans from friends and family. If you are looking for money to start a business or money to grow your existing business, don’t discount the people you already know, your own network. If your idea or your business is worth backing the easiest place to raise finance is usually from people who already know you – they know how capable, hardworking and trustworthy you are.

There are a number of different types of lenders who provide finance to entrepreneurs, these include angels, venture capitalists (VCs), banks, debt financiers, niche lenders, Corporate Enterprise Development (ED), suppliers, personal lenders and government among others. Read up about each of them and find out who they typically fund, what products they offer and what their lending criteria is to help you decide who you should be approaching.

Who can help me answer these questions? 

Thankfully for entrepreneurs, there is an easy-to-use website that provides the answers to your questions and best of all, it’s free. This revolutionary one-stop solution for access to finance for entrepreneurs is called Finfind.

Besides providing practical tips and information on finance, Finfind’s primary service is to auto match you with all the lenders and finance options in the country that meet your specific finance needs. You are simply required to answer some questions about you as the owner and about your business and Finfind does the matching and links you with the appropriate lenders.

Finfind has a large database of the all the lenders and finance products in South Africa that is kept up to date on a daily basis. Finfind is backed by the Department of Small Business Development.

Since its launch by the Minister of Small Business Development at the end of 2015, Finfind has facilitated over 35 000 small business loan leads.

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Now download a bank account

Absa has introduced an end-to-end account opening for new customers, through the Absa Banking App, which can be downloaded from the Android and Apple app stores. This follows the launch of the world first ChatBanking on WhatsApp service.

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This “download your account” feature enables new customers to Absa, to open a Cheque account, order their card and start transacting on the Absa Banking App, all within minutes, from anywhere and at any time, by downloading it from the App stores.

“Overall, this new capability is not only expected to enhance the customer’s digital experience, but we expect to leverage this in our branches, bringing digital experiences to the branch environment and making it easier for our customers to join and bank with us regardless of where they may be,” says Aupa Monyatsi, Managing Executive for Virtual Channels at Absa Retail & Business Banking.

“With this innovation comes the need to ensure that the security of our customers is at the heart of our digital experience, this is why the digital onboarding experience for this feature includes a high-quality facial matching check with the Department of Home Affairs to verify the customer’s identity, ensuring that we have the most up to date information of our clients. Security is supremely important for us.”

The new version of the Absa Banking App is now available in the Apple and Android App stores, and anyone with a South African ID can become an Absa customer, by following these simple steps:

  1. Download the Absa App
  2. Choose the account you would like to open
  3. Tell us who you are
  4. To keep you safe, we will verify your cell phone number
  5. Take a selfie, and we will do facial matching with the Department of Home Affairs to confirm you are who you say you are
  6. Tell us where you live
  7. Let us know what you do for a living and your income
  8. Click Apply.

 

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How we use phones to avoid human contact

A recent study by Kaspersky Lab has found that 75% of people pick up their connected device to avoid conversing with another human being.

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Connected devices are becoming essential to keeping people in contact with each other, but for many they are also a much-needed comfort blanket in a variety of social situations when they do not want to interact with others. A recent survey from Kaspersky Lab has confirmed this trend in behaviour after three-quarters of people (75%) admitted they use a device to pretend to be busy when they don’t want to talk to someone else, showing the importance of keeping connected devices protected under all circumstances. 

Imagine you’ve arrived at a bar and you’re waiting for your date. The bar is busy, and people are chatting all around you. What do you do now? Strike up a conversation with someone you don’t know? Grab your phone from your pocket or handbag until your date arrives to keep yourself busy? Why talk to humans or even make eye-contact with someone else when you can stare at your connected device instead?

The truth is, our use of devices is making it much easier to avoid small talk or even be polite to those around us, and new Kaspersky Lab research has found that 72% of people use one when they do not know what to do in a social situation. They are also the ‘go-to’ distraction for people even when they aren’t trying to look busy or avoid someone’s eye. 46% of people admit to using a device just to kill time every day and 44% use it as a daily distraction.

In addition to just being a distraction, devices are also a lifeline to those who would rather not talk directly to another person in day-to-day situations, to complete essential tasks. In fact, nearly a third (31%) of people would prefer to carry out tasks such as ordering a taxi or finding directions to where they need to go via a website and an app, because they find it an easier experience than speaking with another person.

Whether they are helping us avoid direct contact or filling a void in our daily lives, our constant reliance on devices has become a cause for panic when they become unusable. A third (34%) of people worry that they will not be able to entertain themselves if they cannot access a connected device. 12% are even concerned that they won’t be able to pretend to be busy if their device is out of action.

Dmitry Aleshin, VP for Product Marketing, Kaspersky Lab said, “The reliance on connected devices is impacting us in more ways than we could have ever expected. There is no doubt that being connected gives us the freedom to make modern life easier, but devices are also vital to help people get through different and difficult social situations. No matter what your ‘connection crutch’ is, it is essential to make sure your device is online and available when you need it most.”

To ensure your device lifeline is always there and in top health – no matter what the reason or situation – Kaspersky Security Cloud keeps your connection safe and secure:

·         I want to use my device while waiting for a friend – is it secure to access the bar’s Wi-Fi?

With Kaspersky Security Cloud, devices are protected against network threats, even if the user needs to use insecure public Wi-Fi hotspots. This is done through transferring data via an encrypted channel to ensure personal data safety, so users’ devices are protected on any connection.

·         Oh no! I’m bored but my phone’s battery is getting low – what am I going to do?

Users can track their battery level thanks to a countdown of how many minutes are left until their device shuts down in the Kaspersky Security Cloud interface. There is also a wide-range of portable power supplies available to keep device batteries charged while on-the-go.

·         I’ve lost my phone! How will I keep myself entertained now?

Should the unthinkable happen and you lose or have your phone stolen, Kaspersky Security Cloud can track and protect your device from data breaches, for complete peace of mind. Remote lock and locate features ensure your device remains secure until you are reunited.

 

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