The current financial position of South Africa has led to a large liquidity shortage for most businesses. Healthy financial business acumen is to preserve liquidity, and so, instead of utilising one of their most precious resources – cash – more and more businesses are looking to external funding for their capital expenditure requirement.

This trend, for the past couple of years, has increased and is evident not only in the private sector but in the public sector, too.

Finding the right partner

External funding shouldn’t come from just anywhere, however.

Companies all over the world have come to recognise that it is best to focus on their core proposition while outsourcing the rest of the services they need to build their business.

From HR and payroll services, to cleaning, logistics, and marketing, choosing the right partner offers a cheaper, more effective, and faster source of expertise. This, in turn, has the potential to create a mutual focus on growing each other’s business.

What not to do

When looking to grow their business, small businesses tend to make these mistakes:

• The lone ranger: Instead of giving up a bigger share of the partnership – a decision based on long-term growth – businesses try do everything themselves because they are mindful of the short-term loss of equity. In the long term you could make 10-fold what you would have made trying to do something out of your area of expertise
• A new way: Some businesses feel that whilst they can take on a partner who has many years’ experience in a specific market, they can always do it better themselves. Sometimes, it’s not necessary to reinvent the wheel
• Brand new: Buying brand new equipment as opposed to good-valued used equipment can put a business under cash flow pressures. As a start-up, good, used equipment that still has a decent life span to get your business up and running can be more beneficial in the long term. This results in less pressure on cash flows, in turn, building up good cash reserves to buy new equipment in the future

Growth loading

One way a business is able to grow is by acquiring moveable assets such as ICT, medical, and earthmoving equipment, commercial vehicles, and plant machinery etc. However, small businesses tend to turn to their cash as a resource for these medium-term asset finance requirements. When cash is used to acquire such equipment, a valuable resource disappears.

This is where partnering with an asset finance company like Finance Africa, plays a vital role in raising the right kind of funding for these additional resources.

Get liquid the right way

Finance Africa is able to offer clients huge value for their business growth in various ways:

1: Finance experts

We all come from ex-corporate banker or rental finance backgrounds, having held senior-level or directorship positions within the banking fraternity, and so, have immense value to add to small businesses.

2: Understand your needs

Our team makes an effort to understand you, your business and your requirements. When we start the funding procurement process, we deal with junior right up to the senior level and directors within our internal and external funders. We have a 17-year track record and are classified as the top intermediary within these organisations.

3: Due diligence

To ease your mind, we present an abridged due diligence in a format that is professional and systematic. We make sure to source the funding from carefully selected financiers who expertly deal with these types of moveable assets or any other specific requirements of your business.

4: Partners, not shareholders

We do not aim to become a shareholder in your businesses; you do not have to sell a portion of your businesses to alleviate cashflow pressures, forfeiting future earnings. We become your partner.

5: Better solutions

We are able to easily negotiate better funding solutions for you, such as a reduced rate and reduced security for the funding facilities, to name a few.

Looking forward

Securing external funding for assets needed to grow your business in these tough times can bring a welcome relief to your cash flow. However, it takes a partner that understands your business to truly make a difference.