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Retail Capital CEO Karl Westvig.
Retail Capital CEO Karl Westvig.

Local businesses make access to funding easier


Issued by Retail Capital - Jul 18th 2018, 08:29

The South African funding space has had a shake-up with news of a joint venture that will make it easier for small businesses to obtain the right kind of funding so that business owners can now access capital quickly. 

The South African funding space has had a shake-up with news of a joint venture that will make it easier for small businesses to obtain the right kind of funding so that business owners can now access capital quickly.

As volatility continues to hit the SME sector, two firms ‒ Retail Capital - that provides working capital to small businesses and the payment solution provider Sureswipe ‒ have entered into a partnership to provide easier, more accessible channels of funding so that business owners can better track and manage their income and expenses.

Sureswipe’s system traces the small business’s turnover so that after three months it will generate a sufficient profile for business owners to determine if they pre-qualify for Retail Capital’s merchant funding that has the potential to open new avenues of growth.

According to Retail Capital CEO Karl Westvig, the partnership brings a much-needed level of data-driven scrutiny to the South African funding space and provides merchants with greater access to funding channels.

“It is in our business DNA to innovate, and we believe that by expanding our partnerships and the services we provide we are making a difference not only in the success of each business but in the growth of the SME in South Africa in its entirety,” says Westvig. “Our partnership with Sureswipe gives us access to a pool of entrepreneurs who want to take the next step in growing their businesses, but might not have the finance to do so.”

The ability to grow is vital not only to small businesses but to the South African economy as a whole.

According to a World Economic Forum article written by Babson College professors Daniel Isenberg and Vincent Onmenyeh, high-growth firms, far more than startups, are the "real generators of jobs, taxes and wealth".

Unfortunately, it’s not always easy for businesses to get the funding they need to fuel that growth.

In fact, a 2017 survey found that 52% of entrepreneurs viewed access to funding as their biggest challenge.

That’s hardly surprising, especially given that traditional funding sources, such as banks, tend to view small businesses as being incredibly high-risk.

Jean-Pierre Seger, GM VAS, at Sureswipe confirms that this is true in the payment service provider’s experience too.

“The biggest challenge most business owners face is access to working capital to invest in their business growth or assist with cash flow during seasonal cycles,” he says.

The partnership between Retail Capital and Sureswipe is changing that.

Data from the two companies shows that, of the businesses to get funding, 79% use the money to reinvest in their businesses - mostly for expansion, renovation and stock purchases. Of those, almost 64% have shown growth in the following four to six months.

"Giving easy access to funding assists the owner when the business most needs it,” says Seger. “The increase in turnover in the following months not only has a positive influence on their profit margins but also gives them access to further funding and opportunities that would not have been possible through conventional funding channels."

For Sureswipe and Retail Capital, the partnership is a fundamental change to the way small businesses are funded in South Africa.

“The payment solution space is in a rapid phase of evolution,” says Sureswipe founder and MD Paul Kent. “It’s moved from being about convenience and safety to providing automated data for inventory and now funding applications as we can now provide our merchants with access to capital. This partnership puts us at the forefront of that evolution and entrenches our position as a leading enabler of South African businesses.”

“Even established businesses struggle to access the finance they need to take their businesses to the next level as traditional venture capital models now tend to fund the later stages of business development,” says Westvig. “We believe growing the small business sector is key to a prosperous South Africa and our joint venture with Sureswipe is a model of just how to do that.”


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