Financing for SMEs (KykNET’s Winslyn)

Most aspiring entrepreneurs say that they don’t have the capital they need to start their businesses and existing businesses have the same reasoning; No capital = No growth.

The recipe for success lies in starting small with very little money and once the business proves itself, one can explore expanding, at which stage more options to capital will present themselves; but what exactly are these options Traditional banking and financial institutions offer loans to businesses; but let’s be frank, banks don’t give money to small businesses easily and when they do; it’s only when the business or the business owners can provide security.

Let me share with you, three ways existing businesses can get financing without having to go to one of the four big banks.

They can explore financing against orders; invoices and or property.

When doing business with large companies, there are institutions that will advance you money upon the receipt of the orders from your customers. These institutions know the orders are in good standing and carry the risk of borrowing you the money to execute the order. Usually, financing is advanced upon the placement of the order and repayment is due once the client effects payment to you, this is called financing against orders.

One may also consider financing against invoices which works similar. Upon invoicing clients, we often find that those invoices only get paid after 30 days if not more. Today there are institutions that offer financing options to take over these invoices or (debtors) from you and pay you instantly. These institutions charge a small percentage of the invoice amount and still allow your business to operate removing the burden and effort of collecting payments from customers.

Financing against property is an option available for both businesses or individuals that own property and have an equity in the property. So, what exactly does that mean, well let’s say you have a mortgage of R1m and the property/building is valued at R2m; you essentially have an equity of R1m on the building. Some institutions today, advance people money equal to their equity and they will then use the property as security for it. Institutions like Rand Trust are one of the largest companies in this trade and they are dedicated to helping SME’s with alternative ways of financing.

If you own a good business, there’s no reason as to why you shouldn’t get financing – maybe not at a traditional bank, but there are a variety of other options.

Visit my website at and let’s discuss small businesses and the interesting world of entrepreneurship.


1 Comment

  • Gerhard Pretorius
    July 19, 2016 at 6:29 am — Reply


    Ek reageer op jou video wat jy gemaak het ivm finansiering vir klein besighede. Jy praat van Rand Trust. Kan jy ander ook voorstel wat ek kan kontak.


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