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.”
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.
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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.”
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.”
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.”
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.
- Player: Dov Girnun
- Company: Merchant Capital
- Est: 2013
- X-Factor: Fast, simple cash advances to fund working capital for SMEs.
- Connect: www.merchantcapital.co.za ; email@example.com ; +27 (0)11 217 2880
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.
“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:
- I Am Emerge Provides An App For Township Spaza Bulk Purchasing
- Tuluntulu Offers High Quality Video Streaming On Low Data Speeds
- SSG Consulting Developed KEY360: A Cloud-Based And Web-Enabled Platform For Managing Large-Scale Construction Projects
- Pargo Solving Last-Mile Distribution Challenges
- HouseME Is A Digital Real Estate Platform
- Olympic Paints Has Developed A Built-In Paint Tray Causing An Unexpected Industry Shift
- Passion4Performance Developed A Recognition of Prior Learning Assessment Concept
- NewSpace Systems Delivers High Quality Components At Lower Costs
- My Online Presence Creates End-To-End Solutions For Online Brand Presence
- Skynamo Offering Insights To Sales Teams In The Field
- RecruitMyMom Creating A Platform For Job-Seeking Moms
- GAAP Provides A Hardware And Software Point-Of Sale And Enterprise Solution For The Hospitality Industry
- HeroTel Bringing Wi-Fi To Low Income Communities
- Saryx Engineering Offers Digitised Compliance and Safety For Companies
- BrightBlack Is An Energy Providing Innovative Solar Energy Solutions
- Howler Is An Event Technology Platform
- execMobile’s PocketWifi Keeps Business Travellers Connected
- Rhino Africa Provides Online Touring Assistance
- Snapplify Is Offering Students Access To Textbooks
- GoMetro A Commuter-Driven Mobile App
- Domestly Connecting Cleaning Professionals and Homeowners
- NMRQL Using AI To Deliver Consistent Returns
- Colony Live Connecting Users Across Multiple Platforms
- codeX Is Growing The Work Experience Of Coders In Africa
- This Is Me – Disrupting By Offering A Unique Business Model
27 Of The Richest People In South Africa
Here are 27 of South Africa’s richest people, but how did they achieve this level of wealth? Find out here.
Learn the secrets of SA’s most successful business people, here is the list of the 27 richest people in South Africa:
In a world with growing entrepreneurship success stories, victory is often measured in terms of money. The feat of achieving a place on this list is, however, years of hard work, determination and persistence. “One has to set high standards… I can never be happy with mediocre performance,” advises Patrice Motsepe.
From the individuals that made the 27 of the richest people in South Africa list, actual entrepreneurs and self-made business people dominate the list; while those who inherited their fortunes have gone on to do even bigger and better things with their wealth. Over the years, some have slipped off the list, while others continue to climb higher and higher each year.
- Elisabeth Bradley
- Sharon Wapnick
- Bridgette Radebe
- Irene Charnley
- Wendy Ackerman
- Paul Harris
- Wendy Appelbaum
- Mark Shuttleworth
- Desmond Sacco
- Giovanni Ravazzotti
- Markus Jooste
- Gus Attridge
- Gerrit Thomas Ferreira
- Cyril Ramaphosa
- Adrian Gore
- Raymond Ackerman
- Michiel Le Roux
- Lauritz Dippenaar
- Jannie Mouton
- Stephen Saad
- Patrice Motsepe
- Allan Gray
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- Ivan Glasenberg
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- Johann Rupert
- Nicky Oppenheimer
Watch List: 50 Top SA Black Entrepreneurs To Watch
South Africa needs more entrepreneurs to build businesses that can make a positive impact on the economy. These up-and-coming black entrepreneurs are showing how it can be done.
Early-stage South African entrepreneurial activity is at an all-time high of 11%, according to Global Entrepreneurship Monitor, and entrepreneurial intentions have also increased to 11.7%. With both activity and intentions growing significantly year-on-year, there are more businesses opening up around South Africa than ever before.
The increase in entrepreneurship has seen the rise of more black entrepreneurs across numerous sectors. From beauty brands to legal services and even tech start-ups, these are 50 top black entrepreneurs to watch:
- Joe Phalwane
- Nandi Dlepu
- Sonto Pooe
- Michel M. Katuta and Thabo Mphate
- Naledi Sibisi
- Reabetswe Ngwane
- Neo Lekgabo
- Vusani Ravele
- Lulo Rubushe
- Samke Mhlongo
- Sizwe Nzima
- Nicolas Bereng
- Lebo Mphela
- Monalisa Molefe
- Siya Kolisi
- Leah Molatseli
- Nhlanhla Dlamini
- Fhumulani Nemukula
- Itumeleng Mpatlanyana
- Nozipho Dube
- Sarinah Matema-Morgans
- Nneile Nkholise
- Mahadi Granier
- Shalton Mothwa
- Theo Mothoa-Frendo
- Bakani Ngulani
- Ndabenhle Junior Ngulube
- Sandra Mwiihangele
- Constance Mapule Bhebhe
- Ignatious Nkwinika, Mbulelo Mpofana, Shane Curran
- Karidas Tshintsholo
- Mutoda Mahamba and Gavin Waldeck
- Ntuthuko Shezi
- Botlhale Tshetlo
- Dineo Lioma, Loretta Magagula, Danisa Nkuna and Lindiwe Nkosi
- Neo Ratau
- Mpodumo Doubada
- Obakeng Moepya
- Ouma Tema
- Lucky Kgwadi
- Nyakallo Mokoena
- Sibongile Sambo
- Mogau Seshoene
- Sibongile Booi
- Khanya Mzongwana
- Nkazi Sokhulu and Tlalane Ntuli
- Nothando Moleketi
- Nthabiseng Ramaboa
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