Gauteng is responsible for around a third of South Africa’s GDP, but small business owners based in the province’s capital, Johannesburg, may not feel that funding reaches them as easily as those numbers suggest.
While attempting to grow, small and medium-sized enterprises (SMEs) often feel the strain when waiting for slow-paying customers, needing to fund a large contract, or simply the tedious process of securing traditional funding.
In this article, we set out seven funding options that established businesses in Joburg and beyond might not have come across, and how each one can help them keep trading through the gaps and move on opportunities sooner.
1. Lula Cash Flow Facility
Many funding facilities charge their customers a fee for the entire facility, regardless of whether they use it. This can cause problems because it’s wasting money that could be spent elsewhere in the business.
Lula customers avoid this cash drain by only paying a fee on what they actually draw down from the Cash Flow Facility. There are no interest or admin fees, and you don’t need to reapply should you choose to draw down the money again after paying it back.
The facility has a straightforward application process which you can complete online in minutes, and you have the option of linking your bank account to share read-only transaction data alongside your bank statement and credit history. This lets Lula get a full picture of how your business is trading right now.
Many of the more than 25 000 enterprises that have used Lula to date have been based in Johannesburg, where competition for contracts is fierce, quick access to funding can be the difference between taking advantage of the next growth opportunity or letting it pass.
Best for: SMEs looking for flexible growth capital that helps them expand, instead of just filling gaps.
2. Bridgement
Bridgement provides funding based on your invoices and/or by pulling data from your accounting software or bank account.
Popular with SME owners because of their affordable and personalised funding, Bridgement typically makes a lending decision within a couple of days, rather than the drawn-out process of larger banks.
Best for: B2B businesses looking to free up funds from unpaid invoices.
3. Genfin
Genfin’s main financial product is a short-term unsecured business loan, including six and twelve-month products. Decisions arrive within 24 hours, and payouts follow a day or two later.
Unlike traditional banks, Genfin takes business performance and cash flow patterns into account instead of obsessing over your credit score.
Best for: Established businesses looking for a secure provider with fairer lending criteria than a traditional bank
4. GroWise Capital
GroWise Capital offers what it refers to as “no-nonsense funding”, which it provides via a short online application and quick lending decision.
Applicants need R50,000 turnover per month, six months’ worth of trading, and an SA registration to qualify, and they’ll be assessed on the sustainability of their cash flow, as well as more traditional requirements.
Best for: Owners looking for a clear application process and a quick funding turnaround.
5. Merchant Capital
Merchant Capital advances a lump sum against future card sales and recovers an agreed share of daily card turnover until settlement.
Borrowers can fix repayments in line with their takings, which suits Johannesburg’s restaurant, salon, and retail operators.
Best for: Businesses looking for working capital funding based on their future card sales.
6. Purchase Order Funding
Purchase order funding is a financing method that pays your supplier on the strength of confirmed customer orders. The lender will then take repayments from you, plus any interest or fees on top of it.
It’s popular with SMEs in Gauteng because it helps to fulfil large orders that they otherwise couldn’t afford to take on; however, costs can be higher than other forms of funding.
Best for: Suppliers and manufacturers with confirmed orders and limited stock capital.
7. Gauteng Enterprise Propeller
The GEP is a government agency formed to support SMEs in Gauteng. It offers funding, as well as mentorship and business development support.
The agency is not a specialised funder, so applications can take much longer than the providers listed above, and the eligibility bar is much higher. Once secured, however, funding terms tend to be favourable.
Best for: Businesses that can plan months ahead and meet the development criteria.
Choosing the Best Option for Your Business
SMEs now have a better choice of small business funding in South Africa than a decade ago, but with more choice comes a dilemma: just which one suits your business best?
Government funding is a sensible option if you’re not in a rush to have the money in place, but if you’re seeking speed and flexibility, then Lula stands out as a funder built around how SMEs actually trade. Its Cash Flow Facility differs from a credit facility because it charges no interest and no monthly or admin fees, only a fee on the amount you actually draw.
Whichever route appeals, the best idea is to fully review all feasible funding options before committing to an agreement with the provider.
