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We’re going to come out and say it: securing business funding sucks. Outdated business funding processes belong to an anachronistic lending system which – let’s face it – is crumbling under the advance of a more customer-centric fintech industry. SMEs that need a business loan are losing interest in these processes – literally. When you account for all those application fees, that interest is swirling down a cash drain.
Bloated funding application processes which are also major time-suck. For any business, but especially SMEs, time is a seriously precious commodity. Most businesses cannot afford to wait for months on end to receive business funding. When you need a business loan, you need a business loan now.
Why traditional funding doesn’t help SMEs that need a business loan
The application process may as well require a human sacrifice
Let’s set the scene: you’re a business owner or an accountant. The organisation needs a business loan, quickly. You need to see out a cash flow drought or buy new equipment or fund a new project to stimulate growth. So, you do what any regular Joe would do. You visit a lending institution to ask for an advance.
Good news! They’re more than happy to help. That is, as long as you have an established track record with the institution in question, you’ve been trading for at least 2-3 years, and you can supply detailed business plans, financial projections, and you’re willing to exchange your firstborn child for a line of credit. We’re just kidding about that last one. Or are we?
And then, there are the complex fee structures to contend with
Alright, let’s say that you’ve survived the application process and secured a facility with your lender of choice. They eagerly supply you with a fee structure so complex that it requires a degree in ancient Latin to understand. Here’s a simplified guide to some of the fees that you ought to look out for:
Application fees, aka origination fees
It costs money simply to apply for a loan facility from some lenders, even if your application is unsuccessful. It’s completely free to apply for a facility with Bridgement, and there are no obligations to use it.
Facility fees, aka account/service charges
Some lenders will charge you with running costs simply for having an account or an overdraft facility with them, regardless of whether you’re using it or not.
Bridgement won’t charge you for having a facility with us. We’ll only charge you a fee for each withdrawal you make from your facility. It’s totally pay-per-use. If you don’t use your Bridgement facility, you don’t pay for your Bridgement facility. Simple as that.
Early settlement penalties, aka termination/cancellation fees
Some lenders will impose a penalty for settling your account ahead of schedule. Sometimes, you are even obligated to pay all of the interest and fees on your account as if you held it for the full term.
That just doesn’t make sense. You should be rewarded for early settlement, not penalised. Bridgement won’t impose a penalty if you settle your account ahead of time. We’ll actually give you a pro-rated discount on the outstanding fees.
Free up your fees: single and simple > compound and complex
Bridgement charges a single fee based on a simple rate on the amounts advanced to you. You pay back the amount we advanced to you (the “principal”) + our fee. That’s it. No hidden fees. What you see is what you get.
We’ll even give you a sneak peek into the cost of your facility with Bridgement with our free loan repayment calculator.
Out of order: business funding just doesn’t work for SMEs anymore
The reality is that most South African businesses need access to credit a lot faster than most reputable lending institutions can provide it. Bridgement grants business leaders access to a lump sum of up to R5 million for a fixed term, normally within 24 hours. Once you’ve been approved for your Bridgement facility, you can repay and reuse it as many times as you need for recurring costs.
Not quite in the market for a business loan? Bridgement also offers business funding solutions like a line of credit and invoice financing (which you might also know as invoice discounting or debtor factoring). Apply today and get funded tomorrow. Simple as that.