Small business, big money

How a novel fi­nance match­mak­ing site is shaking up the start-up sec­tor and link­ing small business with cap­i­tal providers.

Finweek English Edition - - THE WEEK TREND - Ed­i­to­rial@fin­

oine f were to imag­ine an on­line dat­ing ser­vice for money and business – mi­nus the self­ies en­hanced with the ap­pro­pri­ate fil­ters – FinFind would be it. The in­no­va­tive on­line plat­form con­nects small and medium-sized en­ter­prises (SMEs) in search of fund­ing with fi­nance providers that match their spe­cific fi­nance needs – whether it be grants, debt or eq­uity.

It is the SMEs sec­tor’s worst-kept se­cret that ob­tain­ing start-up fi­nanc­ing is a bat­tle – one en­coun­tered by FinFind CEO Dar­lene Men­zies fol­low­ing her de­ci­sion to start her own business in 2004.

“I failed a num­ber of times be­fore suc­ceed­ing in build­ing a scal­able fin­tech business,” Men­zies tells fin­week of her in­spi­ra­tion behind the fi­nance match­mak­ing firm, launched at the end of 2015. Pre­vi­ous busi­nesses failed, be­cause she “couldn’t find a one-stop so­lu­tion to help me find fi­nance when I needed it”.

“These fail­ings and ex­pen­sive lessons be­came op­por­tu­ni­ties to de­velop prac­ti­cal, af­ford­able so­lu­tions for the start-up and small-business mar­ket – FinFind be­ing one of these.”

To­day, FinFind hosts over 200 len­ders and more than 350 fi­nance of­fer­ings, from both the pri­vate and public sec­tor. The de­tails and lend­ing cri­te­ria of each of­fer­ing is stored in a lender data­base and is up­dated on a daily ba­sis.

Business own­ers are re­quired to answer a se­ries of ques­tions about their business pro­file and lend­ing needs on the FinFind web­site, and this in­for­ma­tion is then used to link them with fi­nance of­fer­ings that match their needs. Ac­cess to the web­site, which also of­fers on­line fi­nance ed­u­ca­tion, is free.

“The web­site also pro­vides ac­cess to over 3 000 ac­coun­tants and small-business ad­vis­ers across the coun­try who can as­sist SMEs with their fi­nance doc­u­ments and other fund­ing readi­ness chal­lenges,” she ex­plains.

Ini­tially, len­ders were re­luc­tant to en­gage with an un­known fi­nance middle-man, Men­zies says, but even­tu­ally most bought into the con­cept.

“One of the big­gest prob­lems len­ders have is that they get high vol­umes of ap­pli­ca­tions with a very high re­jec­tion rate – it costs them a lot of time and money to ac­cess these leads, which in turn drives up the cost of SME lend­ing.

“The SME mar­ket is also an ex­pen­sive au­di­ence to mar­ket to as they are very dis­persed and use var­i­ous en­gage­ment medi­ums. As such, len­ders are be­com­ing in­creas­ingly keen to get ac­cess to the leads that we have al­ready fil­tered and matched against their spe­cific lend­ing cri­te­ria,” she says.

FinFind is cur­rently grow­ing at a rate of over 7 000 new users per month, with over 45 000 loan leads matched with the spe­cific cri­te­ria pro­vided by len­ders for their fi­nance prod­ucts. “We are find­ing our en­gage­ment with len­ders eas­ier than we did at first as they are start­ing to un­der­stand the ben­e­fit we are pro­vid­ing to the SME as well as to them as the fi­nance provider,” Men­zies holds. Sup­port from the Bank­ing As­so­ci­a­tion of South Africa, Business Lead­er­ship South Africa, USAID and the de­part­ment of small business de­vel­op­ment has fur­ther eased lender en­gage­ment. Men­zies, who was ear­lier this year named one of Africa’s break­through fe­male tech en­trepreneurs by the World Trade Or­ga­ni­za­tion, mean­while, ap­peals to en­trepreneurs and small business own­ers to en­sure that their busi­nesses are con­stantly in a state of fi­nance readi­ness, re­gard­less of whether they are cur­rently look­ing to raise cap­i­tal. Cen­tral to this is the cre­ation of an elec­tronic folder that is kept up­dated with cer­ti­fied copies of the IDs of all the business own­ers, up­dated copies of each one’s per­sonal state­ment of as­sets and li­a­bil­i­ties, proof of res­i­dences, com­pany reg­is­tra­tion doc­u­ments; six months’ business bank state­ments; up-to-date man­age­ment ac­counts; signed lat­est an­nual fi­nan­cial state­ments; cur­rent bud­get, 12-month pro­jec­tions, an up­dated business plan and a cur­rent tax clear­ance cer­tifi­cate. “It is good business prac­tice and it puts you on the front foot should you need to ever ap­ply for fi­nance. This cov­ers 80% to 90% of the doc­u­men­ta­tion and in­for­ma­tion that a lender will re­quire from you. They say success is where prepa­ra­tion and op­por­tu­nity meet – al­ways be pre­pared, you never know when an op­por­tu­nity may present it­self,” she ad­vises.

“They say success is where prepa­ra­tion and op­por­tu­nity meet – al­ways be pre­pared, you never know when an op­por­tu­nity may present it­self.”

Dar­lene Men­zies CEO of FinFind

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