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Lula Inventory Financing

Table of Contents
Lulalend Inventory Loans
Introduction

Funding is a crucial part of growing a business. Small to medium-sized enterprises (SMEs) are in a tricky position because there is capital, but they can’t see to access it. But that has changed since the growth of alternative funders who provide capital quickly and require little to no collateral. One of the many products brought into market by alternative funders is inventory financing.

What is Inventory Financing?

Inventory financing is a short-term loan or revolving line of credit that product-based businesses use to purchase inventory, with the purchased stock serving as collateral.

With so many lenders providing inventory financing, it’s important that SMEs pick the right funding partner, and the one we recommend is Lula.

What is Lula?

Lula (formerly known as LulaLend) is a South African fintech company that provides digital business funding and banking solutions for SMEs.

What is Lula’s Inventory Financing?

Lula’s inventory funding provides SMEs with working capital up to R5 million to purchase stock, fulfil purchase orders, and bridge cash flow gaps.

Check what you qualify for

Related: Inventory finance explained  ·  Working capital loan  ·  All funding options

Main Features

Application process : Lula’s application process is 100% online. To apply you will be required to share standard personal and business information, as well as upload recent bank statements or link your internet banking account via Yodlee. You can get approved in 24 hours.

Repayments: With Lula’s inventory financing you can choose between 6 and 12-month terms.

Qualifying criteria: Lula requires that you have a minimum monthly turnover of R40,000 as well as an annual turnover of at least R500,000 and it must be actively trading for at least one year.

Pricing

Lula charges a fee (cost) which is based on a % of the principal amount funded. The cost varies between 5% and 12% and is determined based on the risk and overall scoring of the business.

Monthly costs are 3% – 10% of your advanced amount for the first 2 or 4 months (plan dependent) and 2% for each of the remaining months.

To qualify for financing from Lula, you must the following requirements:

  • Be a registered South African business
  • Have a trading history of at least one year
  • Monthly revenue must be R40,000 or more
  • Credit score must be in good health
Pros and Cons

Pros

No collateral is needed
No long queues or extensive paperwork
Transparent, flexible terms
Access to finance in 24-hours

Cons

The affordability assessment
Not ideal for large funding requirements
Limited loan amounts
FAQs

Lula Inventory Loans are typically designed for established SMEs that require additional capital to purchase inventory.

Lula’s process is much faster and takes place completely online. The company requires no paperwork or collateral. Its costs are transparent and agreed upon upfront, and they do not charge admin or initiation fees and there are no penalties for settling early.

While specific requirements can change, you may typically need basic business documents like financial statements, bank statements, and business registration certificate.

Repayment terms for inventory loans are usually shorter than traditional business loans. They may range from a few months to a year, depending on Lula’s offerings and your agreement.

Failing to repay a loan can have serious consequences. It’s crucial to understand Lula’s late payment fees and the potential consequences of defaulting on the loan.

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