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How to Put your Small Business in the Best Position to Get Credit from a Bank

There are specific ways in which you can reassure a bank that your business is capable of repaying any money they lend you, increasing your chances of acquiring credit

Standard Bank

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Small and medium enterprises (SMEs) account for almost half of South Africa’s gross domestic product (GDP), up to half the formal wage bill, and some 60% of private sector employment. So, most banks feel it is important to find ways to give SMEs access to finance to increase the positive effect they have on the national economy.

Related: How to Fund your Small Business

The trouble is, though, that banks are strictly regulated, because they are responsible for the billions of rands entrusted to them by individuals and businesses. In other words, like SMEs, banks play a vital role in the economy. They cannot put themselves at risk by lending money to small businesses that might fail.

As a result, they have standard processes and procedures for assessing the credit readiness of a business and how likely it is to repay what it borrows.

Get credit ready

“As the bank for entrepreneurs, we focus on making access to credit possible and, therefore, take different approaches to helping SMEs get to credit readiness,” says Ethel Nyembe, Head of Small Enterprise at Standard Bank.

“We believe that credit is only one element of an SME’s financial responsibilities. So, it should not become a burden to the business. For that reason, our Small Enterprise unit offers basic affordable banking services that enable small businesses to build financial records and capacity.

We then add to these services, tools, such as our small business portal, that enable SME owners and managers to build their financial management capabilities.

“We also provide our SME customers with credit solutions that range from simple overdrafts and asset (vehicle) financing, to working capital and property finance services. These are complemented by payment, investment, risk management and cash management solutions designed to help them improve their credit worthiness.

“More than 90 of our relationship managers around the country are trained to provide these services. It’s worth taking the time to talk to them to understand what you need to do to help us help you.”

Get the 5 C’s in place

Another way of doing this is to follow the bank framework of the ‘five Cs of getting ready for credit:

  1. The first C is for ‘character’ and relates to your personal records, behaviours and attitudes. You need to show a good record of repaying debt, a good record in the industry in which you operate (including qualifications, certification, industry networks, and customer base), how committed you are to your business in terms of the time and money you have invested, and how much business management capability you have.
  2. Then there’s ‘capacity’. This relates to your business’ ability to repay specific amounts at specific times. Can you afford the new debt? How strong is your cash flow? How reliable is your income and will there be money in the bank on the day you need to make repayments?
  3. Capital’ refers to how much your business is worth in rand terms, how much you and other investors have put into the business, and whether you have other means of settling your debt if the business cannot.
  4. Collateral’ is about the assets you agree to use to repay the bank if your business cannot.
  5. The last C, ‘conditions’, takes into account external factors that could affect your business. Environmental conditions refer to the general state of your industry and the area where you trade, consumer demand, the state of the national economy, your competition, and the banks’ risk appetite as a result of all these factors. ‘Conditions’ also includes the purpose for which you need finance. You need to show that the loan will be used to develop the business instead of getting it out of trouble.

“Any owner of an SME who comes to us with as many of the five Cs in place as possible already demonstrates that they are serious about their business and about interacting with the bank responsibly,” says Nyembe. “It’s a great way to start a business banking relationship with us.”

Standard Bank SA is the largest operating entity of Standard Bank Group, Africa’s largest bank by assets. Standard Bank SA provides the full spectrum of financial services, with more than 720 branches and over 7 100 ATMs. Independent surveys of customer satisfaction consistently place Standard Bank at or near the top of their rankings. The personal and business banking unit offers banking and other financial services to individuals and small-to-medium enterprises. For further information, go to community.standardbank.co.za

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4 Black-Owned Businesses Participating in This Enterprise Development Programme That Are Growing – Fast

The Department of Small Business Development (DSBD) and Property Point have joined forces to take 16 small to medium-sized, black-owned, businesses, through a life-changing enterprise development programme.

The Business Place

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The Department of Small Business Development (DSBD) and Property Point have joined forces to take 16 small to medium-sized, black-owned, businesses, through a life-changing enterprise development programme.

In its first three months of operation, this programme has already seen incredible results with an average growth rate of 27% per business,  R17,8million in contract secured and 21 direct jobs created. This is a unique collaboration in that it is set up specifically to encourage access to markets for the beneficiary businesses and is the first of its kind in the industry.

But who are the people behind the numbers?  Meet four out of the 16 business owners , Thabiso, Falvia, Malusi and Mandla taking full advantage of this opportunity.

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Calling All Social Entrepreneurs: Be SA’S Next Changemaker With The Nation Builder Social Innovation Challenge

In partnership with LaunchLab and the Mergon Group.

Mergon Group

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Nation Builder, together with the Stellenbosch University LaunchLab and the Mergon Group, is inviting business pitches for their inaugural Social Innovation Challenge. The competition aims to identify and support South Africa’s social entrepreneurs, with an opportunity to win a share of R150 000 seed capital.

Entrepreneurs with a self-sustainable business idea – no matter how simple or small – that addresses particular social issues, positively impacts communities, empowers the disadvantaged, or has the potential to solve local problems in innovative ways, are invited to enter the Social Innovation Challenge.

Ten finalists will receive exposure to a broader network of business investors at the final pitching event, which will be hosted by LaunchLab in Stellenbosch on 13 June 2018. Three final winners will receive their portion of R150 000 funding capital, as well as business support from LaunchLab.

Related: How To Be A Social Entrepreneur

In addition to social innovation specialists, media and social development experts, the judging panel will consist of astute business leaders who have successfully walked the entrepreneurship journey.

“Social entrepreneurs are those who see social challenges as opportunities, devise sustainable business solutions to meet those needs, and positively impact many South Africans in the process,” says Keri-Leigh Mac Donald, Executive Director of Nation Builder, an organisation that supports businesses in leading social change in South Africa.

“Social entrepreneurs are the next wave of change makers and social reformers. Nation Builder wants to support and showcase some of these great and emerging home-grown social businesses as a means to challenge us all to think differently when addressing our local social challenges,” she adds.

According to Brandon Paschal, Head of Incubation at LaunchLab, most of the start-ups that the LaunchLab currently work with already have a strong social conscience. “We have worked with many great small businesses in sectors such as mental health, financial inclusion, job creation, empowerment, and sustainability.  We’re excited for them to have this platform with Nation Builder and the broader network of great socially-responsible companies. It is a wonderful way for them to gain more exposure, but also to work with like-minded partners that can help take their businesses forward, without compromising on their social conscience and the greater purpose of their business.”

The winning entrepreneur and their business idea will also be showcased at Nation Builder’s In Good Company conference in Gauteng in August 2018. In addition, they will receive exposure through the various Nation Builder, Mergon and LaunchLab media channels.

“The societal benefits from these enterprises can bring about increased economic activity and opportunities for many more South Africans, while playing a pivotal role in breaking the cycles of social ills that many people are facing daily. The Nation Builder Social Innovation Challenge is a first step in fuelling and highlighting local social innovation solutions,” says Pieter Faure, CEO of Mergon.

Related: 3 Ways For Social Entrepreneurs To Access Fundraising

Submission requirements: Submit a 3-minute video (cell phone footage can be submitted too) of yourself explaining your business idea with your entry form which can be found on the LaunchLab website: http://www.launchlab.co.za/nationbuilder2018

Pitches (video entries) need to focus on providing the following information:

  1. Provide a brief summary of the business/social innovation idea and its history.
  2. What is the particular social issue that the business idea aims to address?
  3. How does the business idea solve or address the social issue?
  4. Explain how the business intends to make money and be sustainable, while clearly describing the target market or customer profile.
  5. What key milestones have been achieved within the venture already?
  6. What is the strategy to grow the business and scale the social impact?
  7. Anything else that the panel needs to know?

Submissions opened on 14 March, and the deadline for online submission entries is 11 May 2018. The top ten finalists will be notified by the end of May. Finalists’ transport to and accommodation in Stellenbosch for two nights will be provided.

LaunchLab’s terms and conditions apply, and are available to download here:  https://launchlab.co.za/innovationchallenges/competition-terms-conditions/

The three winning pitches will be announced at the pitching event on Wednesday 13 June 2018. The panellists’ decision is final.

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How Your Devices Can Improve Your Business Travel

Dawn Weir, head of kulula work and a veteran business traveller, offers these tech-savvy tips for road-warriors.

Kulula Work

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Technology has made business communication and business travel easier than ever, but it’s still possible to have a minor disaster involving your indispensable devices. Dawn Weir, head of kulula work and a veteran business traveller, offers these tech-savvy tips for road-warriors.

Stay on track

Activity trackers can help you stick to your fitness regime by recording step-counts, distances covered, sleep and nutrition. If you don’t fancy wearing one that looks like it’s from the flight-deck of the starship USS Enterprise, others are available which clip onto your ankle or clothing. Many are water-resistant and rugged, but if you prefer to not buy-one, apps like Samsung Health will record and analyse your daily activity.

Related: Kulula Work Brings You The Cheapest Flights Of The Day For Your Business Travel

Power naps

A few bad nights’ sleep while travelling can leave one feeling unfocused and tetchy. Some of us sleep better in hotel-rooms than others, and some can be downright noisy. You can try using earbuds, but we don’t all like having wads of foam stuck into our skulls when trying to slip into the arms of Morpheus. One alternative is to load a white-noise generator on one of your devices. A site like www.mynoise.net has hundreds of soothing sounds, including waves, rain, crackling fireplaces, trickling streams and even Tibetan monasteries.

It might not drown out the sound of the guys returning to the hotel from their “team-building dinner” at 2am, but it’ll help to smooth out the noise of traffic and air-conditioning.

Cancel the chatter and clatter

travelling-for-business

Many business-travellers now swear by noise-cancelling headphones, which block out distractions and racket and can subtly let fellow travelers know that you’d prefer to not engage in lively conversation. Researchers disagree on the effectiveness of binaural beats for everything from creativity to concentration, but many students, academics and entrepreneurs find that they help with focus the mind.

Stay juiced

Most mobile devices have decent battery-life nowadays, but the size and brightness of their screens and the plethora of apps running on them can drain that very quickly. Save your battery by switching off anything you don’t need: BlueTooth, location, mobile data and so on, as well as apps you’re not using. Switching your phone to Flight mode will also save battery power. Travellers increasingly user power-banks to boost battery-life, but Weir suggests reading users’ product reviews before buying one, as some are far more efficient than others.

Related: Flying High With Reliable Travel Partners CANCOM And Kulula

Back up and go

Save your important documents – scans of your passport if you’re travelling internationally – as well as hotel reservations and travel itineraries, and take pictures and screenshots of them on your phone. That all-important PowerPoint presentation? Use a file-hosting service like Dropbox to put it in the cloud so you can access it wherever you need to.

Declutter

travel-in-south-africa

If you’re a regular business traveller make a point of emptying all your luggage every few weeks. You’ll probably find you’ve accumulated flash-drives, USB adaptors and stationery and other stuff that takes up space and adds weight.

Downsize

Everyone from business travelers to backpackers loves the portability of laptops, but while they’re lighter than ever, those with bigger screens can be bulky. One option is to travel with a tablet, which offers the efficiency of a laptop while taking up less space. If you need to do a lot of inputting while you’re on the road, get a flexible keyboard that can be rolled up until need, or pair your tablet or smartphone with a laser projection keyboard. It’s a clever gizmo that projects a full-sized QWERTY keyboard onto any flat surface, allowing you to type pretty much anywhere.

Related: How To Take The Hassle Out Of Business Travel With Kulula Work

Converge

We’ve all seen the infographics showing how smartphones combine all the devices we once owned separately, like cameras, DVD- and CD-players, and that innovation continues. The Belkin Travel Rockstar combines a battery pack, surge protector and charger. It has three plug-ports (you may need an adaptor, depending on which plug configuration you use) and two USB ports.

Still not high-tech enough? Try Pluggage, a smart suitcase produced by luggage brand www.delsey.com that has its own app. It’s available in three sizes and its features include fingerprint ID to lock and unlock it (you can also lock and unlock it using the app), interior lighting and speakers. It weighs itself, has integrated USB chargers for your devices, and GPS tracking notifies you when it’s on a luggage carousel at the airport or being loaded onto or off a flight.

To make your business travel that much easier and to find out more about kulula work call +27 (0)11 285 3050, email sales@kulula.com or visit www.kulula.com/work.

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