The top four reasons SMEs requested funding in 2017 was startup capital, buying equipment, expanding businesses and working capital. This is according to finding of the Finfind ‘SA SMME Access to Finance Report’ released in July.
Alice Leah, operations manager at Finfind, an online platform, shared with the attendees at the recently held FundEx some harsh truths about why they are possibly not getting the funding they need at the recently held funding expo for entrepreneurs, FundEx, held at the Riversands Incubation Hub.
Here are 9 challenges entrepreneurs face when trying to access finance, according to Leah.
1. They don’t know who all the funders are.
See: Funding and ESD Focus
2. They don’t understand the different funding offerings.
See: Your SME Financing Options Explained
3. They don’t know what the funders need from them.
See: Why you Need to Research the “Flavour” of Potential Investors
4. They don’t understand finance terms.
See: SA Entrepreneurs Need Better Financial Skills to Build Sustainable Businesses
5. They don’t have all the documents needed – poor record keeping/lack of finance
See: FundEX Speaker Gives Tips on Networking with and Approaching Funders
6. They waste a lot of time and money running around applying for finance they don’t
qualify for, resulting in funding fatigue.
See: First Fix the Leaky Bucket
7. They have a poor or inadequate trading history.
See: Find Out About The Consulting Firm That’s Helping Businesses Secure Millions In Funding
8. They have a poor credit record/no credit history.
See: The Surprisingly Simple, But Powerful Habit Behind This Entrepreneur’s Success
9. They have poor financial management (budgeting and cash flow).
See: 5 tips for a better business budget