Wholesale businesses in South Africa tend to face the same paradox.
Winning large orders is, of course, important, but they tend to put businesses under cash pressure that can make life difficult. They need to pay for materials and wages before they receive the customer payment, often several months before.
What’s more, seasonal spikes mean that several orders come at once, which add even more strain to cash reserves.
Read on to find out about six funders that specialise in helping wholesale businesses bridge this gap.
1. Lula
Lula tops this list because one of its signature products, its Cash Flow Facility, is designed to help businesses beat the recurring capital squeeze.
Fast and flexible, Lula funding applications are approved in an average of 22 hours, providing a capital reserve that businesses can tap into to ease cash flow when it matters most.
They get access to a pool of up to R10 million in working capital and pay only for what they use, with no interest or monthly account or admin fees.
Many businesses find this an extremely useful alternative to purchase order funding because they can pay for large orders promptly. Inventory financing is made easier because you can draw down to buy stock ahead of a busy period, then repay as it sells.
Lula carries out firm but fair assessments on each application, which are designed to protect the borrowing business without eating up as much valuable time as typical loan applications. These include having a minimum monthly revenue of R40 000, a credit score in good standing, and a consecutive trading history of at least one year.
Best for: Wholesale businesses seeking growth by quickly covering the recurring gap between paying suppliers and getting paid.
2. Bridgement
Bridgement helps wholesalers settle supplier bills quickly with its invoice finance product, which allows them to repay the sum over a certain period.
It comes with built-in Xero and Sage integration, so it can quickly scan your finances for quick approval, and funds often arrive within 24 hours.
Best for: Wholesalers that need to cover late payments or a specific supplier bill.
3. Merchant West
Established in 1998, Merchant West is one of the larger privately owned working-capital providers in South Africa.
Its stock finance pays approved suppliers directly, while its confidential invoice discounting advances up to around 80% of your debtor book. Facilities are structured and assessed over a few days rather than minutes.
Best for: Larger, established distributors seeking a tailored facility.
4. Genfin
Genfin lends to established businesses, with loans starting at R100,000, over fixed terms. It charges interest on the reducing balance rather than a flat fee, and assigns a dedicated analyst to each application for hands-on support.
Best for: A planned, one-off investment such as a warehouse move or a major stock build.
5. GroWise Capital
Many businesses seeking a stock or cash advance turn to GroWise. This solution lets you use existing inventory as security on your funding, or to land a cash advance that you repay as a share of turnover.
Approval is fast, and terms can be anything from six weeks to twelve months. This flexibility is useful for businesses that are never fully sure what type of order will come in next.
Best for: Covering those urgent stock buys that appear unexpectedly for small businesses.
6. Merchant Capital
Card sales now make up a large percentage of a wholesale business’s revenue, and Merchant Capital helps firms take advantage of this with its cash advance. Borrowers repay using a percentage of their monthly card sales, helping them through busier periods.
Wholesalers that can demonstrate steady point-of-sale or card revenue find this solution particularly useful.
Best for: Businesses with unpredictable income yet strong card sales.
Matching the Option to the Gap
For wholesale businesses in South Africa, the best funding option on this list depends on the size and nature of their cash flow gap. A single large order, for example, might call for a different solution to a recurring shortfall.
Of all the providers on this list, Lula is best suited to serve both. Its funding products are designed for any cash flow bottleneck, which is why more than 25 000 South African businesses have used it to keep cash moving, drawing over R13 billion since 2014.
Businesses that get their funding right are the ones best placed to grow in a challenging economy and competitive market.
