Funding: The Great Challenge for many South African SME’s and Startups

The country is relying on SME’s to create jobs, 11 million jobs by 2030 to be precise. Depending on where you get your stats, SME’s contribute between 20%-42% to the country’s GDP. 70% to 80% of small businesses close within the first year of operation. Thereafter, only about half of the survivors will last for the next five years, many small business failures are due to lack of funding or cash flow difficulties.

Gurus in this space advise to borrow cash, only if it’s essential, and this move should be preceded by cash flow planning and forecasting. What is the opportunity you are chasing and what’s the return? If returns exceed the cost of credit, that’s good for the business. Use your own money as far as possible. If that’s running out, and you’re onto a good thing, see if family and friends can’t help before going the formal route.

Sources of funding

Alternative sources of funding

Final Thoughts

We have provided a few options available both in the traditional and alternative space when in search of funding either for starting your business or to bridge a gap in your cash flow. Every source of funding has tailored packages for what you have and what you need. Ultimately, you, as the business owner, have to make the decision on which to choose, depending on what you can afford and what suits your budget and cash flow plans. Our team at Iridium are here to help you navigate this journey. Get in touch with us if you’d like to chat further about your business and its cash flow needs.

Peter Magner

Peter Magner

Peter is an avid trail runner and sports enthusiast. He has a passion for people and technology and uses these skills to help grow Iridium Business Solutions. He currently heads up the Sales and Marketing for the company, whilst also managing a team of Cloud Accountants. In 2019, he was fortunate enough to be selected as one of the SAICA Top 35-under-35.
Peter Magner

Peter Magner

Peter is an avid trail runner and sports enthusiast. He has a passion for people and technology and uses these skills to help grow Iridium Business Solutions. He currently heads up the Sales and Marketing for the company, whilst also managing a team of Cloud Accountants. In 2019, he was fortunate enough to be selected as one of the SAICA Top 35-under-35.