Fast and accessible lending options now available to small business through the Xero platform
Xero, the global small business platform, today announced new agreements with a group of South Africa’s new digital lenders: Bridgement, Retail Capital and Lulalend. These carefully selected finance providers will improve South African small businesses’ access to much-needed funding – and in so doing, help South African businesses reach their growth objectives.
Small businesses using Xero now have access to a much wider variety of lenders directly from the platform. These lenders will also be able to access applicants’ financials quickly and efficiently, cutting down on paperwork and fast-tracking the approval process.
Built on top of Xero’s world-class open API, they enable faster decision-making, access to payments and access to capital.
South Africa’s small to medium enterprises (SMEs) are crucial to the country’s economy as it’s estimated that SMEs contribute over a third (34%) to the country’s GDP and make up roughly 90% of South African formal businesses. To ensure SMEs are positioned for growth and success there needs to be fast and secure access to funds and capital.
Colin Timmis, General Country Manager, Xero SA said: “Xero’s mission is to help South Africa’s small businesses thrive by removing the friction involved in accessing funds. A lack of capital is one of the biggest challenges impeding small business growth in this country. By integrating the latest business finance apps with Xero, SMEs will have access to real-time accounting data, and help them access much-needed capital”.
Here’s a closer look at the three alternative lenders that have integrated with Xero.
Bridgement offers near-instant invoice financing and credit facilities to SMEs, to the tune of R10 000 to R1 million. Established in 2016, its co-founder, Daniel Goldberg, saw a gap in the market to provide SMEs with an alternative to admin intensive and prohibitive traditional bank financing. With Bridgement’s simple short-term financing solutions, SMEs can expand their operations, take on bigger projects and bridge gaps in cash flow.
According to Goldberg: “We reached a personal record, and possibly a South African record, when our quickest time to funding for a customer was 2.5 hours – from application to receipt of funds! The average time amongst major banks in South Africa is around three to five weeks.”
Integration with Xero
When discussing Bridgement’s integration with Xero, Goldberg highlights the openness and innovations of the cloud technology: “A large number of businesses don’t apply for funding because they are disheartened after many unsuccessful attempts or because they don’t understand the process. By partnering with Xero, we are able to leverage the API and innovations to make things even simpler in finance.”
2. Retail Capital
Since 2011, Retail Capital has provided SME businesses with an alternative funding solution to traditional small business. They have advanced more than R2 billion to SMEs and have partnered with over 10 000 business owners providing funding for growth.
“Banks have made gaining access to business finance a very tedious process where Retail Capital offer SMEs with innovative, flexible and convenient funding solutions,” says Miguel Da Silva, MD of Retail Capital Group’s Funding division. “We estimate that the additional funding provided by us over the past eight years has resulted in more than 3,200 direct jobs being created.” According to him, the Xero partnership is designed to offer a faster funding solution.
Integration with Xero
“The Xero API will enable Retail Capital to offer customers easy access to funding, resulting in real-time decision-making on the approval process. It alleviates much of the time pressure when it comes to determining the eligibility of a small business for funding.”
Lulalend was launched in 2014 to help South Africa’s small businesses grow. Lulalend is a digital business and does not meet its customers in person, but with immediate access to customer data, it can make funding decisions in minutes.
According to Lulalend’s founder, Trevor Gosling: “SMEs are a hugely unfunded segment and banks aren’t very proactive with funding to help them grow. We wanted to set up a tech company that could help fund those companies with real scale.”
Lulalend provides transparent and responsible lending to a wide array of clients ranging from those with R100 million in turnover to smaller sole traders. The lender is industry agnostic, but most of its clients come from the distribution and manufacturing, online retail and professional services industries.
Integration with Xero
For Lulalend, integrating with Xero enables instant access to company records through API channels – making it possible to do a quick credit risk assessment. A real-time assessment speeds up funding decisions to gives small businesses the capital they need to grow.
Born in the cloud, Xero is a beautiful, easy-to-use platform for small businesses and their advisors. The company has 1.4 million subscribers in over 180 countries and a thriving ecosystem seamlessly integrating with 700+ apps. On the inaugural 2018 Financial Times FT1000 High-Growth Companies Asia Pacific list, Xero was the fastest growing tech company in the $200 million+ segment. Xero won Technology Provider of the Year at the British Small Business Awards in 2016 and was rated by Canstar Blue as Australia’s best accounting software for four consecutive years, 2015-2018.