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.
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.
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.
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.
Welcome to world of 2099
The world of 2099 will be unrecognisable from the world of today, but it can be predicted, says one visionary. ARTHUR GOLDSTUCK met him in Singapore.
Futuristic structures tower over the landscape. Giant, alien-looking trees light up with dazzling colours amid the hundreds of plant species that grow up their trunks. Cosmetic stores sell their wares via public touch-screens, with products delivered instantly in drawers below the screens.
This is not a vision of the future. It is a sample of Singapore today. But it is also an inkling of the world we may all experience in the future.
Singapore was the venue, last week, of the World Cities Summit, where engineers, politicians, investors and visionaries rubbed shoulders as they talked about the strategies and policies that would enhance urban living in the future.
As part of the Summit, global payment technologies leader Mastercard hosted a small media briefing by one of Singapore’s leading thinkers about the future, Dr Damian Tan, managing director of Vickers Venture Partners. The company’s slogan “We invest in the extraordinary,” offers a small clue to Tan’s perspective.
“We look as far forward as 2099 because, as a venture capital firm, we invest in the long term,” he tells a group of journalists from Africa and the Middle East. “Companies explode in growth because there is value in the future. If there is no growth, they won’t explode.”
The big question that the Smart Cities Summit and Mastercard are trying to help answer is, what will cities look like in the year 2099? Tan can’t give an exact answer, but he offers a framework that helps one approach the question.
“If you want to look at 81 years into the future, and understand the change that will come, you need to double that amount and look into the past. That takes us to 1856. The difference between then and now is the difference you can expect between now and 2099.”
Click here or on the page link below to read on: Page 2: Soldiers and Health in 2099.
- Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee and on YouTube
Street art goes electric
Kaspersky Lab and British street artist D*Face have unveiled the first-ever “art helmet” design at the Formula E finale for electric cars in New York.
The ‘Save The World’ helmets will be raced by DS Virgin Racing’s drivers, Sam Bird and Alex Lynn, as they traverse the New York street circuit during the final races of the Formula E season.
The announcement signals the first art helmet by a Formula E team, continuing the heritage of art in motorsport and the cybersecurity brand’s commitment to contemporary art, creativity and innovation. D*Face took inspiration from Kaspersky Lab’s tagline, “A Company To Save The World”, and hopes that his colourful work will inspire people to take positive action.
D*Face will announce his first-ever art car design with a custom-made livery for the DS Virgin Racing Team. Its design will be released at the “Art Goes Green” event after Saturday’s race. The helmets and art car are the latest installations in the “Save the World” collection, following a major permanent public mural that was installed in Brooklyn, New York, in May.
D*Face, whose real name is Dean Stockton, said: “It is exciting to work with Kaspersky Lab on this project and create art with a real message of hope for a better future. After all, this is our world and we need to look after it. It will take every one of us to make a real lasting, impactful change. I love the mentality of the DS Virgin Racing Team and that of Formula E by showcasing sport in a way that doesn’t harm the environment, but is still just as exhilarating and fun.
“It is time for us all to stand together and make a change… be that stopping data steals, climate change, plastic waste or using damaging fuels. I want everyone to make a pledge to do one thing that will help make a change.”
As a sponsor of DS Virgin Racing Team, Kaspersky Lab is responsible for protecting the team’s devices against cyber threats. The company sees the technical environment in the global sport of Formula E as the next frontier in furthering its research and development of new technologies to keep vehicles secure in the digital world.
Sylvain Filippi, Managing Director at DS Virgin Racing, said: “The whole team fully supports this great initiative and our thanks got to Kaspersky and D*Face for their collaboration. It’s an honour to have such an innovative artist bring his talents to bear in our team ahead of the season-finale; the car, drivers’ crash helmets and mural all look amazing.”
Aldo Fucelli Pessot del Bo, Head of Global Partnerships and Sponsorships at Kaspersky Lab added: “There is a need for innovation on a global scale, both in contemporary art and in the fast-growing sport of Formula E. Now, for the first time ever, Kaspersky Lab is proudly bringing together the two sectors in an effort to Save the World and unleash creativity, encourage freedom of expression and further innovation.”