How your small business can access the right credit

I have dabbled a little in business even as a full-time working professional, and I have personally experienced the strain of trying to get funding as a micro or small business. I can only imagine how much more difficult it becomes as your business grows. As complexities get added across your business operations it soon becomes clear that you need a cash injection to enable stability whilst fostering steady and sustainable growth.

Now what?

When we were faced with this challenge after our seed capital was depleted, my business partner and I made the mistake of sending our business strategy and financial needs documents to all the major banks and development finance entities we could access. Our thinking was simple. We believed a ‘spray and pray’ approach to so many institutions would land us a small business loan with at least one of them.

Of course it didn’t work out as planned. Today I have a few insights into why. First, I am almost certain that all the financial institutions that we reached out to viewed this as panicked behaviour. It was obvious that we weren’t requesting a specific product to align to carefully identified needs. We were just asking for cash and probably even triggered a credit risk flag with our business. My hypothesis was strengthened when the few financiers that got back to us all asked the same leading question: How many more institutions did you submit your application to besides us?

From spray and pray to targeted solutions

What we needed was a finance partner that we could engage prior to providing any documentation, and if we got a sense that they understood our needs and were able and willing to assist, then we would submit a formal application.

This is the approach that we take as Sasfin when engaging a potential client. We call it our ‘beyond a bank’ solutionist view.

Taking a leaf out of Simon Sinek’s Golden Circle Model, we know that clients rarely come to us and ask for our products by name. Instead, there is usually a business problem that they want us to solve, and as we engage them, they narrate a story that unearths the true demands that we need to solution for. This is what we are good at. We are a specialist bank that builds and delivers solutions for our clients based on their needs.

Think about what this looks like in action. Instead of a client submitting an application for credit, they instead tell us their needs. This could be anything from, “I want to purchase a vehicle” to “I need a second warehouse.”

Once we understand the need, we can recommend the correct product. But it’s much more than only matching product to need. We also look at how our clients want to work and where they want to submit the application, usually via a tablet or smartphone. They want to be able to afford loan repayments without damaging the business’s finances, which is also where understanding the business and its needs is important – credit products should add value to the business, not create bigger problems.

Banking solutions for small and growing businesses

At Sasfin, we are not trying to compete with big business and commercial banks. In fact, we’re doing the opposite. As an entrepreneurial bank, we understand that our value does not lie in us building a generous spread of products that look the same as everyone else’s offerings. Instead, we build deep expert knowledge and invest in solutions that enable small businesses to grow into medium and large corporates that drive the wealth of this continent.

Instead of building the next 20 bleeding-edge banking products and spraying them out into the market and praying for the right take-up based on our own internal models, we take our time to deeply understand our clients’ needs and together we structure deals that work for them and where they are in their journey.

This partnership is most valuable to us because it enables us to use continuous engagement and analytics to make data-driven business decisions that improve our client service levels and strengthen our specialist banking value propositions.

We take a “cradle to grave” approach to building client solutions, and we ask client questions that are outside of the traditional banking construct. We go beyond.