2020: A year of opportunities for SMEs
Jonathan Goldberg, CEO of Preference Capital
Even though the challenging economic conditions will remain for at least the short-to medium term, and access to funds via traditional routes will be difficult, there are still significant opportunities for SMEs. So, while larger more regulated funding institutions remain constrained in their capital assistance, businesses like Preference Capital can supplement the requirements of the SME market to help it grow, create more employment, and boost the economy of South Africa.
In fact, the SME space is a very popular sector of the market to fund because of its growth potential. Of course, Preference Capital has several diverse businesses targeting different areas of this critically important sector.
Cash Flow Capital
This niche Merchant Cash Advance lender predominantly targets the retail market, lending money to local retailers. With Black Friday beating expectations and December providing decent trade during the festive season shopping period, there are good reasons to be cautiously optimistic.
Because Cash Flow Capital understands the retail market, it can help those small business operating in the sector meet their capital requirements. It provides them with the means to fund their growth and buy stock to meet demand during such peak shopping events.
Building from this retail success, Mobile Macs has been experiencing massive growth. This specialist rental provider of bikes to the delivery market has recently topped 2 000 bikes in operation. Its partnership with Mr D has proven to be beneficial for both parties and growing strongly. The delivery market is really going through the roof in terms of demand and Mobile Macs is the only national provider of these bikes offering customers a full service value proposition.
By servicing bikes on site and providing replacement bikes if required, Mobile Macs empowers fast food outlets to concentrate on delivering on their strategic mandate – offering quality food as cost effectively and quickly as possible.
More recently, the business launched its e-pedal bikes that do not require a licence to drive. This makes it ideal for deliveries with a kilometre or two of a fast food outlet. Even better, it lets the store find a balance between dedicated drivers for scooters and using waiters not currently busy to do deliveries on e-pedal bikes.
We have also started a division that rents bikes directly to delivery drivers. They rent these on a weekly basis and already this segment has grown to in excess of 100 bikes. It really is a wonderful success story for entrepreneurs looking to grow their own delivery business.
Alternative Finance Solutions
Another one of our business that are showing fantastic growth is the BizCash portal. This focuses on single invoice discounting and is a simplistic way for SMEs to get funding into their business.
It is a case of logging on to the portal, uploading the required documentation, going through a small credit process, and getting funds approved within two to three days. Once registered, it also provides the SME with an easy way of transacting on the portal and getting much-needed cash flow into the business.
While Cash Flow Capital focuses on the retail space, this alternative finance solution puts the spotlight on wholesalers and manufacturers who carry a debtors’ books. We make cash available as quickly as possible and are happy to use one invoice from a client to do that effectively.
Ultimately, all our businesses are embracing fintech in what they do. But this does not mean it is about building technology systems that lend people money. Instead, it is about understanding our customers and incorporating technology to provide a differentiating factor.
For us, it is about combining innovation with a passion to help the SME sector of the country grow. In turn, this will result in a more significant impact on the broader economy that will create an enabling environment for all.