A guide to understanding fintech business funding options

Ventureburn is hosting a new webinar series in partnership with Bridgement, a fintech startup that assists SMEs to replenish cash flow via an easy-to-use online platform. 

South African fintech startup, Bridgement, helps SMEs replenish cash flow within hours

In preparation for the webinar, Daniel Goldberg, CEO, and co-founder of Bridgement explains what business owners should know about alternative funding options. 

Fintech has been around for several years, and now more than ever people are starting to understand the power of technology in enhancing and automating financial services and processes. 

One such fintech startup, Bridgement, has created a simple and fast funding option – arguably South Africa’s quickest for SMEs. 

Why fintech funding?

There are many reasons why an SME might consider applying for funding from a fintech. Firstly, if your top priority is how quickly you can apply and access funds, then your best bet is with a fintech, where paperwork-free applications and same-day funding are now a reality.

Speedy application process aside, an SME might already have bank funding, but they’re growing fast and the bank is unwilling to match their growth with an increased facility. Fintech funding presents a great option for that supplemental funding needed to take on a major project or a big client.

Bridgement offers something even more important: lower barriers to access funding – specifically for SMEs with funding needs under R2-million, as well as for businesses in their first two to three years of trading. 

Daniel Goldberg, CEO of Bridgement outlines how a fintech business can assist SMEs with additional funding. 

“Due to the costs and overheads incurred by traditional institutions on small business loans under R2-million, it’s difficult for them to do so profitably. A fintech on the other hand, leverages technology and automation to more efficiently service smaller business funding needs.”

Goldberg adds that with traditional bank funding requirements being as stringent as they are, young businesses and certain industries are often overlooked altogether when applying for funding. 

“Fintechs solve this problem by using alternative data and credit assessments to lower requirements and make funding possible to younger SMEs, even with just a six month trading history,” says Goldberg.

If any of the above rings true, and if the idea of spending weeks filling in a bank’s application forms daunts you, fintech funding might just be the best option for your business.

What fintechs do differently

Simply put, fintechs leverage technology and data to create new financial products and offer the best possible experience. A fintech like Bridgement does exactly this, creating the simplest application, quickest turnaround times, and completely transparent pricing.

As an SME, it can take on average 3-5 weeks to get funding from your bank. Unfortunately, this is time that many business owners don’t have. Fintechs, on the other hand, offer online applications, without the need for lengthy forms and paperwork. 

The Bridgement application process can take as little as two minutes. Automatic assessments enable Bridgement to give applicants decisions the same day they apply – 9.2 hours is their average turn-around time to be exact. 

“Our record to date is getting funds into a first-time client’s account within 90-minutes of them starting their application. This is a game-changer for SMEs in need and sets the benchmark for SME funding in SA. Eventually, we’ll get our turnaround times to a matter of minutes,” explains Goldberg.

Fintechs have also innovated on the way financial products are priced. You’ll be charged a single, transparent fee per withdrawal which represents the total cost of finance – no hidden fees, no surprises. It’s also completely pay-per-use. In other words, if your facility isn’t being used, there’s nothing to be paid. 

Another differentiator between traditional and fintech funding is the response to good behaviour. While banks and other lenders will often penalise early settlements with a termination/cancellation fee, Bridgement doesn’t. Rather, it rewards its clients by discounting the remaining portion of the finance cost.

Fees

Where some traditional credit providers can charge raising, application or initiation fees as high as 3-5% when opening a facility (over and above your quoted interest rate), with Bridgement it’s free to apply and open a facility, no commitment required. Once a facility is opened, it’s completely pay-per-use – there are no ongoing account or facility fees charged each month.

In essence, you will know exactly what you’re in for from the very start, no fine-tooth comb required. With a single, transparent fee, there’s no need to page through a 200-page PDF to understand your bank’s complex pricing structure. 

Bridgement’s minimum requirements

  • Any SME that applies should be a formal business
  • The company must have been trading for at least six months
  • The company must show a minimum of R40k revenue per month 

Your application can be completed online in two minutes, and involves just a few steps:

  1. Create a free account at www.bridgement.com
  2. Submit your trading history by connecting your accounting package, bank feed, or uploading docs
  3. Complete company details

You will typically receive a decision on your application within a few hours. Once approved you will have access to a commitment-free facility that is ready for use when you are. Successful applicants will be able to withdraw from their dashboard at a click of a button and recieve funds within minutes. 

Bridgement keeps its clients at the forefront of every decision, and by removing all of the unnecessary hassle and noise that traditional funders have yet to reduce. 

Bridgement is able to focus on what matters – funding SMEs and helping them grow their business and the South African economy.

Webinar details

Date: 29 October 2020

Time: 11am 

Register here: https://zoom.us/webinar/register/WN_1RWaGB2KR2uCNyX06u1xTQ 

This content has been created in partnership with Bridgement, a company that assists South African businesses solve their cash flow problems by offering instant working capital facilities online. 

Read more: Local fintech startup aims to financially assist SMEs

Featured image: Daniel Goldberg, CEO and co-founder of Bridgement (Supplied)

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