SMME: accessing finance a challenge

Accessing finance remains a key challenge to SMMEs. A recent snap survey by Fetola shows that 93% of small businesses are uncertain about where and how to access finance.

This finding was confirmed in the 2014 GEM report released by the University of Cape Town’s Graduate School of Business. The Report found that a key challenge to small business development is not a lack of available finance per se, but the knowledge to access it.

Key for Success

This lack of financial nous seems to be a common theme for many finance providers. Many fairly robust businesses struggle to gain finance for similar reasons – their recordkeeping is poor, they are deemed too risky, they are still in a start-up phase or don’t fit BEE lending criteria.

The businesses that do succeed in attracting finance seem to share some common traits, and the most important of these is an understanding of what finance partners require from applicants before they will part with their cash. Sound recordkeeping is another non-negotiable.

Money is available

It appears that available money for investment in new and emerging enterprises is not the problem, and some research would bear this out. While accessing start-up finance from commercial banks does indeed remain out of reach for many entrepreneurs, an increasing number of ‘angel investors’, venture capitalists, government-aligned funding agencies and other potential sources of finance seem to be filling the void created by the more conservative lending policies of the major finance houses since 2008.

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