22 Feb
2019

Capacitating SMEs to Raise Capital


capital

93% of SMEs don’t know where or how to access finance, hampering their ability to grow and deliver on contracts and expectation of corporate buyers

We see this every day. Businesses are awarded lucrative contracts they’ve been chasing for months, but they haven’t started their capital raising process early enough or have tried to raise capital early on but don’t have the skill to know where and how to access the right finance from. Many of these businesses could be financed if they had the skill internally or through the appropriate advisors.

With over 420 financial products available to South African SMEs from various commercial, alternative and developmental funders – offering everything from debt to equity and grants with varying terms, rates and requirements – figuring out the right finance is overwhelming at best.

A business owner is good at selling their offering, making sure its customers are serviced and managing the moving parts in between, however, they typically don’t have experience in raising capital.

The typical financial training provided to SMEs is focused on historical financial management and controls, which is necessary but typically doesn’t cover the capital raising processes and requirements.

Furthermore, this is often an activity which most accounts and auditors have limited to no exposure.

There are 5 core fundamentals which SMEs need to understand and be equipped with to ensure they’re able to directly or indirectly (through advisors) access finance:

  1. Where to access finance based on need and stage of the business
  2. The common pitfalls and trip-ups in raising finance
  3. The different stakeholders and their roles in the capital raising process
  4. The importance of compliance
  5. The process and timelines in different types of raising finance

Having assessed over 2,500 SMEs for finance, Uzenzele has developed activity-based training for SMEs to learn these fundamentals in the form of group facilitated training programmes offered through incubators, accelerators, and supplier development programmes.

 

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