South African businesses have a great failure rate compared to other countries; with five out of seven failing in their first year of trading; mostly due to cash flow problems. Small businesses such as restaurants, beauty salons and independent retail stores are considered to be high risk entities, which typically mean that banks are not willing to assist without guarantees. The small business sector does play an important part in job creation within South Africa but yet faces numerous challenges that continually hinder it to fight unemployment rates.. According to Statistics South Africa June 2014, South Africa shed 75 000 jobs in the first quarter of the year alone with some of largest declines in employment were observed in the wholesale and retail trade.

While cash flow is a universal challenge, those people who are starting and running small businesses in South Africa face extra financial strains. The good news is that there are finally some new options available to these business owners for lending and borrowing. One such option is Retail Capital’s business cash advance. It is an accessible, flexible and convenient funding product that adapts to the clients’ business needs. No security is required, there are no restrictions on the use of the funds allocated to a business and money is available within 10 days. “Small business owners are welcoming this flexible funding option, that is more easily accessible than traditional bank loans,” says Retail Capital’s CEO, David Lewis. He believes that the South African credit market is conservative and restrictive; and that small business owners are better served by a credit environment that is responsive, simpler and more flexible. The banks’ rigid product offerings, inflexible approach and lack of personal service are common stumbling blocks that obstruct small business owners on the road to securing working capital.  Complex, lengthy application processes and poor approval rates act as deterrents and business owners have welcomed an alternative source of funding that offers face-to-face service; simple, clear and quick processes; unrestricted use of funds and customized, realistic repayment terms.

The business cash advance was introduced to South Africa three years ago and many small business owners are choosing this alternative funding option that is able to provide the working capital they need when they need it.

As active supporters of South African small businesses, Retail Capital partners with their customers to provide a tailored funding option that fits to the business and is able to adapt to the ebb and flow of trading seasons. In contrast to traditional funding products that business owners would be familiar with, the business cash advance effortlessly fits to the small business model and does not require the business to adapt to restrictive policies or requirements. Retail Capital advances a lump sum of the business’s future sales so that it effectively funds its own growth. An agreed proportion of future card transactions are paid over until the total value has been reached.

“We believe that our repayment structure makes it easier for a business to take advantage of those opportunities which often appear, but which we may not always have the cash available to act on,” explains Lewis. “The application process is easy, we don’t need guarantees, there is no fixed monthly debit order and no hidden costs.   It is an on-going source of capital which can be renewed and paid out within 48 hours as the original advance is paid down”.