By Candice Marques (Bizcash), Cuan Hopley (Bizcash) & Rowan De Klerk (CFO Centre)
Access to finance remains a very real challenge for high-growth businesses in South Africa, but at the same time does every company fully understand the types of funding solutions that are available to them? Can Artificial Intelligence (AI) bridge this gap or is Human Intervention (HI) still required to successfully secure funding?
Entrepreneurs behind high-growth businesses use “capital” as a catch-all phrase for funding but a good CFO can help you navigate different types of funding while contextualising the business to lenders. In an environment where interest rates are rising, supply chains are under pressure and entrepreneurs are needing to draw on every inch of resilience in their being, we’ve unpacked some of the key considerations for applying for funding.
While there are a number of fintech platforms in South Africa who are improving access to finance, many of these are formula and algorithm driven with a focus on short-term cashflow.
A quality CFO is not only able to ensure that your compliance and financial data is in an appropriate format that reflects historical matters, they are also able to put together cashflow forecasts and management accounts that lenders will require in their decision making process.
Many entrepreneurs who are looking to access funding are not aware that their own credit health is a key consideration for lenders. How you run your personal finances is a determinant in how you are going to manage a loan that is extended to your business.
COVID-19 was an incredibly challenging time for entrepreneurs who often had to access their own personal balance sheets, personal loans and savings to keep their businesses afloat. Just as the economy had begun to recover, we have seen pressure from rising interest rates being exerted.
An experienced CFO is able to have this very personal discussion with the executive leadership and directors of a business and guide them around how they present themselves.