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Lulapay enables SME businesses to have their invoices paid faster allowing business owners to manage their cash flow more effectively.
Lulapay’s platform ensures that SMEs are paid immediately, while still offering reasonable payment terms to their customer base
Created by Lulalend, one of the country’s leading B2B digital lenders, the product is a game-changer when compared to the traditional trading methods being used between suppliers and customers.
Thomas McKinnon, Head of Product at Lulalend provides insight into the overall aims of their new product, Lulapay.
“The launch of Lulapay, a first of its kind in South Africa, is another step towards delivering on our mission of enabling SMEs to get fast, easy, and fair access to the finance they need to grow. At a time when we will be relying on these businesses to drive our economic recovery,’’ says Mckinnon.
According to Lulalend, over 50% of SME sales in South Africa are conducted via trade credit. Trade credit can simply be understood as when a supplier allows a customer to pay the owed amount of money for their product over a specific period of time. Reports by leading credit bureaus indicate that SMEs could wait up to 65 days for payment for their product from customers.
Although this traditional method has been adopted by most SMEs, it can present a host of challenges, with delayed payments and the uncertainty of expected cash flow. This can cause a domino effect on SMEs, impacting revenue flow, employment rates, and the possibility of upscaling their business.
Lulalend also indicates that various SMEs experience various issues with utilising this traditional and old-age method of trade relations.
“However, 70% of SMEs also state that managing trade credit is a significant problem.”
Lulapay and AI-driven technology
Lulapay utilises tailor-made AI drive technology to speed up and simplify the process of receiving payments from various clients. Businesses selling their product to other businesses will be able to receive immediate payment for invoices issued, while still be able to offer their customers payment terms of up to 90 days.
McKinnon elaborates on the importance of SMEs accessing revenue faster and increasing their sales, commenting that these are two integral aims of Lulapay.
“We can help SMEs today by getting invoices paid faster. Business owners have told us that allowing their customers to pay over a period of time is essential for SMEs to attract and retain customers. And for the customer, not having to pay the full amount up front helps them invest in other growth opportunities. Despite these benefits, the ultimate impact of the traditional approach to managing trade credit is that cash still flows too slowly through the system. With Lulapay, we believe there’s a better way.”
In essence, Lulapay provides an improved experience for both suppliers and traders involved in any business to business (B2B) transaction.
How it works
SMEs utilising Lulapays’ innovative tech-driven platform will be able to receive payments faster eliminating the time put into having to chase after outstanding payments.
Lulalend explains that their platform will enable business owners to shift their focus onto business growth instead.
“This cash flow boost, combined with no longer having to spend time chasing outstanding payments, will allow business owners to focus on growing their business while no longer having to worry about the risks of not getting paid in full, or on time, when offering credit to their customers.”
The service of facilitation of the transaction between SMEs and customers is at no cost to the seller (SMEs).
“There are no penalty fees for early settlement. These flexible trade credit terms give the buyer sufficient time to pay their invoice and help maintain a friction-free supplier relationship,” concludes Lulalend.
Featured image: (Left to right) Neil Welman, and Trevor Gosling , founders of Lulalend (Supplied)