Financing | Blog
Calculate your cashflow finance options: funding fundamentals
By Johann S|
January 26, 2023
Let’s imagine, for argument’s sake, that a timer started running the moment you started reading this article. Remember that timer.
Okay, now back to the matter at hand. Because you are reading this article, that means that you are investigating alternative business funding options. Many businesses in South Africa run into cash flow dry periods. Business funding or cashflow finance (tom-ay-to, tom-ah-to) can help keep the tap running until cash is free-flowing again.
Now, there are a few places you can get your cashflow finance solution from. Banks, angel investors, venture capitalists, and alternative lenders are all willing and able to advance you the cash you need – for a price. And that price is not always quantifiable in currency. Applying for these funding solutions can cost you time and effort, too.
The business funding solution that you opt for depends entirely on the unique circumstances of your business. But, making an informed decision is the crucial first step. So, this article will lay out your options for you and explain how to calculate your business loan costs upfront – no commitment, no catch. We’re just here to simplify things for you.
What can I expect from traditional lending institutions?
So, you’ve decided to take the well-worn path to the bank to ask for business funding. Banks are, after all, a logical place to enquire about getting some funding for your business. But, if you’ve never applied for business funding before, there are a few things you might not know about taking a traditional funding route.
Banks do offer overdraft facilities and asset financing solutions, both of which can ease cashflow challenges and sundry business costs. But qualifying for these facilities requires files and files of documents: we’re talking a business plan, financial projections, financial records, and more. What’s more, banks won’t typically approve your application if your business is only in its first 2-3 years of operation or if you don’t already have a track record with them.
On top of that, these applications often take weeks to complete and months to receive a stamp of approval. Most businesses – especially ones in a cash flow drought – simply don’t have the luxury of that kind of time. Even if you do successfully apply for business funding from traditional financial institutions, you’ll need to budget for application fees, account fees, and early settlement penalties.
You can always vie for the financial attention of a venture capitalist or an angel investor, but investors are famously difficult to come by. Plus, appealing to an investor requires you to jump through as many administrative hoops (if not more) as traditional banks. This can make the application process take even longer. Finally, securing an investor often means throwing equity into the deal, which dilutes the ownership of your business.
If those are compromises that you are unwilling or unable to make, don’t sweat it. There are simpler alternatives out there.
Funding fundamentals: alternative cashflow finance solutions
Here are some fundamental truths that we subscribe to about business funding:
- Business funding should not be difficult.
- Business funding should not be time-consuming.
- Business funding should not require a legal team to decode payment structures.
Many South African businesses run into cashflow challenges and struggle to get approved for a flexible business loan quickly and easily. Happily, Bridgement is here to bridge that gap. Bridgement’s business loan facility is convenient, fast, and flexible.
The application process for Bridgement’s business loan facility takes place entirely online. We don’t have to meet in person and you don’t have to submit business plans or financial plans. We like to keep things simple. Paperless is simple. You can apply for business funding without ever having to leave your desk.
Remember that timer you started when you began reading this article? It’s at two minutes. Unless, of course, you skipped right to this heading. Who are we to blame you? Your time is valuable.
The point is, by the time you finish reading this article on your commute to work or during your lunch break, you could have applied for Bridgement’s business loan facility. It takes less than two minutes to apply, and the facility is usually available from your Bridgement dashboard within 24 hours of your application.
With Bridgement, you get approved once and you can repay and reuse your facility with us as often as you need to. Our loan facility is a great cashflow financing option, but businesses also use it to fund new projects and buy new equipment. Plus, if you settle your facility early, we won’t slap you with penalties. In fact, we’ll reward you with a pro-rata discount on the outstanding fee.
Calculate your cashflow financing costs with Bridgement’s loan repayment calculator
In case you hadn’t picked up on it yet, transparency and simplicity are really important to us. To help our clients access valuable foresight, we designed a state-of-the-art business loan repayment calculator which shows you the full scope of the cost of your loan facility with Bridgement. This free tool is intuitively designed to untangle the loan application process for you.
So, how does it work?
First, you tell us how much capital you need. Then, you decide how much time you’d like to pay it back.
The calculator will tell you what your fee is, as well as the cost of your monthly repayments. It’ll also tell you what your total repayment costs are because we believe in total transparency. Oh, that means no hidden costs like account or application fees – ever.
Get business funding up to R5 million today
A quick word to the wise – the loan repayment calculator can only provide an indication of your financing costs with Bridgement. The rates vary slightly according to an assessment of your business, your invoices, and your customers.
For a complete picture of what your cashflow financing solution would cost, apply for your Bridgement loan facility today. No application fees, and no obligations to use the facility. Just accessible business funding, plain and simple.
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