Small business, big money

If one were to imagine an online dating service for money and business – minus the selfies enhanced with the appropriate filters – FinFind would be it.

The innovative online platform connects small and medium-sized enterprises (SMEs) in search of funding with finance providers that match their specific finance needs – whether it be grants, debt or equity.  

It is the SMEs sector’s worst-kept secret that obtaining start-up financing is a battle – one encountered by FinFind CEO Darlene Menzies following her decision to start her own business in 2004.

“I failed a number of times before succeeding in building a scalable fintech business,” Menzies tells finweek of her inspiration behind the finance match-making firm, launched at the end of 2015. Previous businesses failed, because she “couldn’t find a one-stop solution to help me find finance when I needed it”.

“These failings and expensive lessons became opportunities to develop practical, affordable solutions for the start-up and small-business market – FinFind being one of these.”

Today, FinFind hosts over 200 lenders and more than 350 finance offerings, from both the private and public sector. The details and lending criteria of each offering is stored in a lender database and is updated on a daily basis.

Business owners are required to answer a series of questions about their business profile and lending needs on the FinFind website, and this information is then used to link them with finance offerings that match their needs. Access to the website, which also offers online finance education, is free.

“The website also provides access to over 3 000 accountants and small-business advisers across the country who can assist SMEs with their finance documents and other funding readiness challenges,” she explains.

Initially, lenders were reluctant to engage with an unknown finance middle-man, Menzies says, but eventually most bought into the concept.

“One of the biggest problems lenders have is that they get high volumes of applications with a very high rejection rate – it costs them a lot of time and money to access these leads, which in turn drives up the cost of SME lending.

“The SME market is also an expensive audience to market to as they are very dispersed and use various engagement mediums. As such, lenders are becoming increasingly keen to get access to the leads that we have already filtered and matched against their specific lending criteria,” she says.

FinFind is currently growing at a rate of over 7 000 new users per month, with over 45?000 loan leads matched with the specific criteria provided by lenders for their finance products.

“We are finding our engagement with lenders easier than we did at first as they are starting to understand the benefit we are providing to the SME as well as to them as the finance provider,” Menzies holds.

Support from the Banking Association of South Africa, Business Leadership South Africa, USAID and the department of small business development has further eased lender engagement.

Menzies, who was earlier this year named one of Africa’s breakthrough female tech entrepreneurs by the World Trade Organization, meanwhile, appeals to entrepreneurs and small business owners to ensure that their businesses are constantly in a state of finance readiness, regardless of whether they are currently looking to raise capital.

Central to this is the creation of an electronic folder that is kept updated with the following:

• Certified copies of the IDs of all the business owners, updated copies of each one’s personal statement of assets and liabilities, proof of residences, company registration documents; six months’ business bank statements;
• Up-to-date management accounts;
• Signed latest annual financial statements;  and
• A current budget, 12-month projections, an updated business plan and a current tax clearance certificate.

“It is good business practice and it puts you on the front foot should you need to ever apply for finance. This covers 80% to 90% of the documentation and information that a lender will require from you. They say success is where preparation and opportunity meet – always be prepared, you never know when an opportunity may present itself,” she advises.

This article originally appeared in the 6 July edition of finweek. Buy and download the magazine here.