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South Africa’s ICT sector has experienced huge growth in 2022, according to the latest ICT Market Overview Sizing and Forecast 2022 report. However, structural changes may affect growth in various sub-sectors.
Having easy access to finance will be vital for SMEs to fund the investments required to take advantage of the growth opportunities that will come their way in the future.
“ICT businesses have until recently seen a slowdown owing to the economic impact of the pandemic. As the sector is now very much in recovery mode, SMEs can use business funding as a powerful tool to set their businesses up for growth over the last quarter of 2022 and into 2023. But to do this, it’s useful to know exactly what you’ll need to secure business funding,” says Tom Stuart, chief marketing officer at Lulalend.
A particular challenge that fast access to capital can help businesses overcome is supply chain disruption – a common problem for many in the ICT sectors at present due to Covid-19 lockdowns in China. Access to funding can ensure businesses have sufficient liquidity to buy stock in bulk and avoid the risk of having to replace repeat orders which may be subject to further delays.
While funding can help, it is important that business owners plan properly before applying for it. As part of this, they’ll need to be clear on what they’re applying for, how much they can afford and have a plan to pay it back.
To get through the funding application process swiftly and successfully, here are three tips to follow.
Know what you need it for
Often, businesses are rejected because they are applying for the wrong type of finance. Determining your funding need is the first step in the business loan application process. Lender requirements often vary for different types of funding. If you are clear on what type of business funding you’re applying for, you’re better positioned to get approval from the lender.
Have all your required documentation ready
Different lenders have their specific requirements to process applications. Traditional lenders, such as banks, typically require more documentation. Lulalend applicants, for example, only need three months of bank statements or management accounts to complete an application. Typically, the application process is less intensive than most traditional banks, helping business owners get their funding faster.
Plan the payback
Working with the right funder can help business owners make the most cost-efficient funding choice. Some funders allow applicants to choose between three-to-twelve-month payback periods without any early repayment fees. This flexibility helps business owners choose the most relevant terms for their business.
Regardless of the need, planning helps. More than that, working with the right funding partner matters even more.