Small and mid-sized businesses are the cornerstone of South Africa’s economy. They make up approximately 98% of the businesses in South Africa, and yet they continue to struggle to obtain finance to either start or grow their businesses.
The challenges facing SMEs existed long before the Covid-19 pandemic and they will continue to exist in the future.
But does this need to be the case? As all major South African commercial and business banks, including fintechs and alternative lenders that have entered the market, provide financial solutions for businesses. Despite this, surveys conducted with SMEs reveal that one of the biggest challenges SMEs face is ‘we are unable to secure funding to start a business or funding to enable our businesses to grow.’
Understanding the SME landscape
As a business bank that focuses on the SME market and helping businesses to grow and evolve into mature organisations, we have identified three key areas that SMEs need to focus on if their goal is to become funding fit:
What’s important is businesses to understand that despite the various financial solutions available in the market, the business owner needs to ensure that the business is credit worthy to
7 Top tips to becoming credit worthy
Establishing business credit is important to all SMEs, however, it can take time and this can be challenging for business owners. Accept that it won’t happen overnight and then follow these key steps:
Establishing a good business credit rating may assist businesses in negotiating low interest rates with financiers. To avoid a decline on your credit application, take note of the above guidelines – they will assist in improving your business creditworthiness.