As the latest South African business studies attest, the country’s businesses have a great failure rate compared to other countries.
And the figures reveal that five out of seven businesses fail in their first year of trading, mostly due to cash flow problems.
According to Statistics South Africa June 2014, South Africa shed 75 000 jobs in the first quarter of the year alone with some of largest declines in employment were observed in the wholesale and retail trade.
Fundamentally, small businesses such as restaurants, beauty salons and independent retail stores are considered to be high risk entities, which typically mean that banks are not willing to assist without guarantees.
Furthermore, the small business sector does play an important part in job creation within South Africa but yet faces numerous challenges that continually hinder it to fight unemployment rates.
Research also shows that while cash flow is a universal challenge, those people who are starting and running small businesses in South Africa face extra financial strains.
But now, the Retail Capital’s business cash advance (BCA) option seeks to come to the rescue for small enterprises.
Commenting on the BCA, Retail Capital explains, “It is an accessible, flexible and convenient funding product that adapts to the clients’ business needs. No security is required, there are no restrictions on the use of the funds allocated to a business and money is available within 10 days.”
And Retail Capital’s CEO, David Lewis further notes, “Small business owners are welcoming this flexible funding option, that is more easily accessible than traditional bank loans,”
He believes that the South African credit market is conservative and restrictive; and that small business owners are better served by a credit environment that is responsive, simpler and more flexible.
Essentially, the banks’ rigid product offerings, inflexible approach and lack of personal service are common stumbling blocks that obstruct small business owners on the road to securing working capital.
“Complex, lengthy application processes and poor approval rates act as deterrents and business owners have welcomed an alternative source of funding that offers face-to-face service; simple, clear and quick processes; unrestricted use of funds and customized, realistic repayment terms,” says the group.
“We believe that our repayment structure makes it easier for a business to take advantage of those opportunities which often appear, but which we may not always have the cash available to act on,” explains Lewis. “The application process is easy, we don’t need guarantees, there is no fixed monthly debit order and no hidden costs. It is an on-going source of capital which can be renewed and paid out within 48 hours as the original advance is paid down.”
The business cash advance was introduced to South Africa three years ago and many small business owners are choosing this alternative funding option that is able to provide the working capital they need when they need it.
As active supporters of South African small businesses, Retail Capital partners with their customers to provide a tailored funding option that fits to the business and is able to adapt to the ebb and flow of trading seasons. In contrast to traditional funding products that business owners would be familiar with, the business cash advance effortlessly fits to the small business model and does not require the business to adapt to restrictive policies or requirements. Retail Capital advances a lump sum of the business’s future sales so that it effectively funds its own growth. An agreed proportion of future card transactions are paid over until the total value has been reached.
For more information you can visit, http://www.retailcapital.co.za/