Connect with us


Funding Growth

A local funder finds new ways to assist SME growth.

Nadine Todd




The big idea

According to Dov Girnun, one third of SME owners are declined working capital loans.

“There are hundreds of thousands of credit card terminals and SME merchants in South Africa, so we knew there was a market for a product that could quickly and efficiently grant working capital cash advances without requiring personal surety or collateral.

“SMEs, particularly small retailers and restaurants, can use working capital to fuel growth, and that’s the market we wanted to tap.”

The model

Girnun extensively researched the market in the US and has partnered with the US’s leader in this field, headquartered in New York.

As a result, and thanks to a small but focused local team, Merchant Capital’s current turnaround time for funding cash advances is 24 to 48 hours. These are repaid according to future business turnover.

“Our clients need to accept credit and debit cards because our product is repaid through a small percentage of each future card transaction.”

In other words, from each future card transaction a small percentage goes to Merchant Capital and the balance back to the business.

This means that during busier times more of the cash advance is repaid, and in quiet seasons less is paid off – so business owners don’t need to worry about onerous repayments during quieter months.

[box style=”grey map rounded shadow”]

The #1 Reason For Failure of Businesses Over 2 Years. Click Here


The nuts and bolts

Merchant Capital evaluates the last six to 12 months of a business’s transactions, using the average to forecast similar future turnover and evaluating the cash advance the business qualifies for.

“In essence, we are acknowledging that future card sales are an asset of the business, and we are simply unlocking that future asset today.

“It’s a bit like factoring in that we discount a percentage of future card revenue and advance the cash today, but the full 100% is repaid with no fixed repayment term. There is no actual invoice or surety, so we are taking a risk.”


Because it’s an unsecured deal, it’s in Merchant Capital’s best interest for its clients to do well.

This means manageable cash advances are granted so that each client can afford the product, and repayments are specifically structured to not affect profitability.

“We don’t want their businesses to suffer  because we have no recourse to get our money back. We’re not in a queue of creditors. And because we are collecting a fixed percent of future turnover we partner up with the owners in the true sense of the word by sharing in the pain of their slower months by collecting less.

“Working capital allows business owners to buy more stock, try out a new product, or add that summer deck they’ve been wanting to their restaurant.

“Using the restaurant as an example, during the summer months this means an increase in turnover, but when winter comes, the section is closed for the season and turnover decreases, so too do the repayments.”

The team

While Girnun is the founder and owner of Merchant Capital, his investors do have an equity stake, as does his management team.

“I have made a pool of equity available for my senior management team.

Through my time at an equity investment firm I have seen how sharing the success of a business can really incentivise partners to view the business and its growth as their own, with excellent overall results.

The idea isn’t for me to have more of a smaller pie, but share a larger pie instead.

We have an excellent product behind us, but it’s our proprietary system and intellectual property that is choosing clients, evaluating their credit histories, turnover and growth potential, choosing what cash advance they qualify for, and we’re doing it within two days.”

Future growth

Launched in January 2013, Merchant Capital currently enjoys a high approval rate, with 90% of all applications coming through the doors granted a cash advance.

Girnun is currently in talks with local and global developmental banks to extend Merchant Capital’s scope.

“We’ve completed our proof of concept, and are seeing a lot of interest from these funders because the product suits their mandates of job creation, fueling SME growth and developing an African economy.”

The entrepreneur

Dov Girnun is a finance guy. He’s been a member of private equity firm Tau Capital’s team since 2006, and co-founded an online consumer lending business in the UK two years ago.

The business is run by a best in class UK management team, including Girnun’s younger brother, but the experience has given him valuable insight into the sophisticated technology available that allows consumers to receive approval for funding within minutes.

It planted a seed that Girnun has now seen to fruition with Merchant Capital.

Vital stats


Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

Click to comment

You must be logged in to post a comment Login

Leave a Reply


25 Of The Most Successful Business Ideas In South Africa

Find out who’s making waves in numerous industries and how they managed to differentiate themselves in local and international industries.

Nicole Crampton



Prev1 of 26


“Disruption is all about risk-taking, trusting your intuition, and rejecting the way things are supposed to be. Disruption goes way beyond advertising, it forces you to think about where you want your brand to go and how to get there,” says Richard Branson.

South Africa has its fair share of innovative and disruptive businesses taking both local and international industries by storm. From cutting edge space technology to reimagined logistics, and innovative business models, here are 25 of the most successful business ideas in South Africa:

Prev1 of 26

Continue Reading


Colin Timmis Says ‘Position Yourself For Success By Starting With The Numbers’

People pay first who they feel pressure from, so people will pay you when they feel pressure from you.






Entrepreneur Colin Timmis founded South Africa’s first cloud accounting practice in 2011, Real Time Accounting. Then, a few years after being appointed as South Africa’s first Xero partner Colin became Xero Country Manager South Africa. Xero is the emerging global leader of online accounting software that connects small businesses to their advisors and other services.

Related: Pat Pillai On How He’s Helped Over 5000 Entrepreneurs Using 3 Key Steps

Continue Reading

Company Posts

Two 20 Year Olds Reshape Entrepreneur Landscape With New Social Investment Platform

The Merge vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

Merge Connect




Vital Stats

It’s no secret that finding the right investor for your venture is a challenge that most entrepreneurs face. The current process of finding investment is one that is outdated, and limits entrepreneurs due to a lack of time, and network that is needed to find the right investor. But, this doesn’t have to be the case in today’s digital society, says Zander Matthee and Brandon Bate, co-founders of Merge.

“By making the Internet the middleman, we are able to connect with each other much simpler and faster than before” was Zander’s response. “We have taken advantage of this, and have created a digital meeting place for entrepreneurs and investors” added Brandon.

Merge is a social platform that connects entrepreneurs and investors. It aims to simplify, refine and accelerate the process of finding investment for entrepreneurs, and the process of finding investment opportunities for investors. From idea to developed, the platform allows entrepreneurs to present a brief outline of their venture to a network of all investor types. While doing this, entrepreneurs are able to browse through, and connect with investor profiles that suit their requirements.

Related: 8 Codes Of Success That Helped Priven Reddy of Kagiso Interactive Media Achieve A Networth Of Over R4 Billion

From Private Investors to Venture Capital, and everything in between, Merge allows all investor types to join. Investors have the opportunity to personalise their feed to suit their investment preferences, and will be able to connect with innovative businesses – that are looking for investment – at their fingertips. Only once there is a mutual interest in each other, are users able to enter a secure private chat where they can discuss further and share documents under the protection of a digital NDA.

The two boys became good friends during their time in high school at St Stithians Boys College. However, it was only in their last year, 2016, that they decided to pursue their dreams and create the platform. They didn’t know how to code, so rather ironically, they needed some form of investment to get the platform off the ground.


“We knew we had a mountain to climb, but we believed in our vision and that we were really trying to make a difference, and if we could get others to see that, they would be onboard.” said Zander.

Related: Lessons From The Rich And Famous: Manage Your Money Like Oprah To Avoid Going Into Debt Like Nicholas Cage

Chris Peters is one of these individuals that bought into their vision, and became Merge’s first investor. As a successful entrepreneur and part time investor , Chris saw how much value the platform could bring to all entrepreneurs and investors alike. His marketing and strategic background gave him insight into how Merge could play a vital role in a lucrative space, Brand involvement.

“Entrepreneurship and SME development are two key factors that drive economic growth in developing countries like South Africa. That is why brands are currently getting involved, and looking to support entrepreneurs through various means. We have built a platform that allows these brands to successfully market, and execute on the programmes they have created to assist entrepreneurs.” said Chris

Merge was created to assist all entrepreneurs and investors in finding exactly what they are looking for, regardless of age, race, sex, financial position or social status. That is why anybody can sign-up as an entrepreneur. As long as you are determined and willing to work for your dreams. For too long has the investor space been seen as an “elite club for the select few”, and Merge is here to change that. Whether you’ve gotten your bonus at the end of the year and looking for new investment opportunities, or are an active investor, you can sign-up. Whether you’re currently working, or a retired industry leader, you can join as a mentor.

Their vision is to become the ‘go to’, digital meeting place for entrepreneurs and investors, and to truly make a difference in the world.

Continue Reading



Recent Posts

Follow Us

We respect your privacy. 
* indicates required.