Written by Barry Leonard – Funding Hub. MMS Group was granted permission to use this article by the author.
SME business finance in South Africa has evolved over the years. Not only has there been substantial growth in the number of B2B alternative lenders in the South African marketplace, but there has also been growth in the type, and diversity, of products offered. Many business owners are not aware of alternative lenders, which range between 40 to 50 in South Africa. Gone are the days where the only options are an overdraft facility or credit card from your bank.
SME business loans vary substantially and include product types such as term loans, secured or unsecured loans, invoice discounting, factoring, purchase order finance, merchant cash advances, asset finance, asset rentals, line of credit, trade finance etc.
To further complicate matters each one of these products differs in terms of structure of loan terms, interest rates, fees, security, collateral, facilities, advances, deposits and residuals. The product chosen also has a direct impact on cash flow, profit and loss as well as income tax and balance sheet strength.
Read more on How to ‘Shop’ for the right business finance.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)