The Best Small Business Loans Come From a Partner, Not a Facilitator
By J Leighton|
September 1, 2023
If you thought that the best small business loans could only be found in the hallowed halls of traditional financial institutions, think again! The funding needs of South African SMEs have permanently transformed the financing sector for the better. Nowadays, growing businesses needing working capital have multiple options to consider when it comes to fulfilling their funding requirements.
Because growing SMEs need business funding much more quickly than most traditional vetting procedures allow for, alternative financiers have found innovative ways to assess prospective clients and grant access to funding in a matter of days or weeks rather than months.
Plus, because many small businesses do not own the kinds of assets that are typically pledged as security in traditional business loans, alternative funders have also refined their assessment procedures to consider intangible assets like accounts payable as security for revolving finance.
But alternative funding hasn’t just changed the speed and flexibility with which small businesses can access funding that is critical to their growth. Alternative funders have also revolutionised the relationships between lenders and borrowers. The right alternative funder is a great loan facilitator, sure, but they’re more than that – they’re also a great business partner.
The importance of partnership in applying for small business loans
When you’re running a growing business – either as a founder or the financial advisor to one – it can be easy to become absorbed in the bottom line. Especially when the bottom line appears at the bottom of a to-do list which magically gains two check boxes for every one that is ticked off.
But beneath even the bottom line is a story. A story of passionate entrepreneurship, tireless dedication, and a remarkable sense of community. It takes a village to bring a business idea to life. Alternative lenders are a part of that village.
Don’t get us wrong – applying for funding at any traditional institution most likely guarantees a pleasant experience of expert customer service. But, when you’re operating at the scale that is required of most banks, an element of anonymity creeps into the funding process. Eventually, your business name (and all the passion, commitment, and community attached to it) just becomes a number.
Furthermore, when working with a traditional institution, your loan facilitator remains just that: a facilitator. In fact, they can operate as a middleman of sorts, asking a litany of questions and keeping you at arm’s length from the funds that you’ve just worked so hard to apply for. It’s not personal, it’s just business. But, therein lies the problem: it’s not personal.
On the other hand, alternative funding is quick, reliable, transparent and, most importantly, always available. Online lending restores power and agency to the borrower, not the bank. With alternative funding methods, you can request funds from your preapproved loan facility and access them in a matter of hours without ever having to schedule an appointment with a loan facilitator.
In this sense, alternative lenders act more like a partner than a facilitator. We’re here to support your decisions, not question them. And, while we won’t necessarily supervise every financial decision that you undertake as a business leader, we are always just a phone call away.
Why transparency is key in alternative lending
The world of alternative financing sprung up in response to the unique problems that South African SMEs were facing in accessing business funding. Traditional lenders are associated with lengthy and complex application processes, piles of paperwork, and built-in application and account fees (not to mention early settlement penalties). These long timelines and additional expenses are not designed to suit the needs of growing businesses, which typically need fast and flexible funding that declares the cost of finance upfront.
For these reasons and more, transparency is important to SMEs. Transparency is especially important in the realm of alternative financing, as it is a self-regulating sphere. Transparency empowers the borrower, or the SME, to make clearly informed borrowing decisions that can support their development without consigning them to a lifetime of debt. On the other end of the scale, transparency enables funders to make accurate and timely funding decisions that do not become burdensome to borrowers over the repayment term.
It’s a kind of symbiosis – we take care of each other.
In order to uphold these values and contribute to the self-regulation of alternative funding in the country, the South African SME Finance Association (SASFA) was established.
In addition to encouraging transparent and responsible lending practices, SASFA is dedicated to ensuring the fair treatment of SMEs as well as maintaining the honourable reputation and sustainability of the local SME finance sector.
After all, the best small business loans are the kind that turn growing businesses into big businesses. Irresponsible lending doesn’t just endanger SMEs, it threatens the entire alternative financing sector. Fairness and transparency are of the utmost importance.
As our Bridgement founder and SASFA board member Daniel Goldberg puts it, “When a client chooses a provider who is a SASFA member, they are choosing assurance that they are dealing with an alternative lender that is fully compliant and only wants what is best for their business.” I couldn’t have put it better myself, to be honest. The best small business loans don’t come from a provider; they come from a partner who you can trust has your business’s best interests at heart.
The best small business loans come from the people who know you best
One of the most obvious advantages of alternative funding is the speed and flexibility of the financing that is typically on offer. But why are alternative funders able to make such efficient decisions? It’s certainly not because they’re skimping on compliance.
We’ll let you in on something. The reason that alternative financing partners like Bridgement can reach a funding decision in 24 hours or less is because, unlike many traditional funders, we know your small business best.
We know that growing businesses don’t always have tangible assets to pledge as security, so we assess your financial records with an eye for the value that SMEs have to offer.
We know that owners of small businesses don’t have the time to apply for funding time and time again, so we offer revolving credit – affording you the flexibility to access business funding wherever and whenever you need it.
We know that small expenses like account fees, early settlement penalties, and application charges add up really, really fast for small businesses. So, we charge a single, simple fee, and we declare the cost of finance upfront – no hidden fees or unpleasant surprises further down the line.
We know that running a business is complex and time-consuming, but we also know that business funding doesn’t have to be. Let us take care of this one thing so that you can get back to leading your business with all the passion and hard work that it deserves.
Apply for your Bridgement facility online in less than two minutes. Access up to R5 million in less than 24 hours. It’s business funding made simple.
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