Are You Struggling To Find Financing For Your SME? Try Alternative Finance

If you don't qualify for traditional funding or if it isn't the right fit for your SME why not explore alternative funding? We specialise in alternative financing options by providing in-depth and custom plans for you and your business needs.

By
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur South Africa, an international franchise of Entrepreneur Media.

Vital stats

Alternative Finance is finance beyond the traditional – it is defined by the financiers’ area of specialisation – by what they specialise in, whom they serve, and how they provide their funding. It does not replace traditional finance but rather functions as a complementary and additional form of funding.

Tyler Nix_Unsplash

Alternative financiers are specialists – they focus on a particular need and on a specific audience. As a result their ‘how’ is customised to deal with their chosen target market and for this targets unique needs. This applies to the funder’s processes and to their level of flexibility around things such as collateral.

An example of this is that a SME may have an existing R1 million overdraft (their traditional finance) secured by R 1.5 million collateral but suddenly they need R5 million for some kind of contract or bridging finance – they need it fast and don’t have that extent of collateral.

The traditional funder cannot provide what they need, their process is too long and their flexibility is too low. An alternative financier providing bridging finance and specialising in SMEs is ideally positioned to fill this gap.

One of the most significant differences between a traditional funder and an alternative financier is in their process. In the case of the alternative financier, they have often chosen to deal exclusively with a particular customer base, for example SMEs. As a result, this funder has both an affinity and contextually relevant empathy in working with SMEs.

Not only do they speak the same language the funder also has an appreciation for the time and material constraints of the SME and has developed their processes to cater to this market. This applies most notably to the turnaround time of the funding need and to the assessment aspect - where flexibility around things such as collateral is vital in making the finance happen for the SME.

A traditional funder is unable to meet the deadline of a bridging finance need, submitted on an urgent basis, where the finance is needed as soon as 2-3 days from time of application. A specialised or alternative funder is able to do exactly this. A traditional funder is also unable to find creative methods in solving the SMEs lack of high-value collateral in applying for finance.

This SME has generally already used their high-value collateral for traditional credit facilities but now needs funding for growth or resolution of a temporary cash flow challenge. An alternative financier is able to look at such an application in a different way, and has most likely already established alternative ways to make this happen for the SME.

Spartan SME Finance

Written By

Given that Spartan SME Finance is exclusively focused on financing SMEs and entrepreneurs – means that we’re serving a target market with expectations of fast turnaround time, convenient engagement and aversion to documentary compliance. So to meet those expectations – we think technology in all we do. We have created and adopted technology smartly in key aspects of the financing process for SMEs. We pioneered Software Finance for SMEs in South Africa – and this afforded us the opportunity to be plugged into the forefront of the software ecosystem. These insights and networks have been used to develop and adopt the right technology to aid our financing of SMEs.