Access to funding frequently creates a deadlock within a business. The entrepreneur needs funding to ensure the enterprise delivers on new business, but it also needs to meet certain criteria with regard to turnover before it can access funding support. This is the gap that many fintechs specialising in SME funding have seen, and that’s exactly why ProfitShare Partners (PSP) exists.
SMEs that have the right financial support have the potential to build profitable and sustainable businesses. But the biggest barrier many face is that their business hasn’t been operating long enough to have a proven track record, their financials aren’t proving constant, consistent income, or they don’t have collateral. Being a credit provider (usually a bank), a funder cannot afford to gamble on business that doesn’t meet this criterion.
PSP’s model doesn’t require financials, security or even a track record. It provides short-term, fixed-term funding for clients across supply chains and government entities.
PSP Funding Services
Short-term Asset Finance
Working on the principle that you might not know you need a specific tool or equipment until you are in the thick of it and desperately need to acquire an asset, short-term asset finance bridges this gap.
These funds can be applied towards purchasing various pieces of equipment or even buying a business vehicle like a bakkie.
Production and Manufacturing Funding
Since ProfitShare Partners specialises in supporting supply chain businesses, production and manufacturing funding is, naturally, a tool they use to achieve this.
Where a business might not be able to negotiate for 30- or 60-day payment terms, production funding enables the borrower to pay its creditors, obtain raw materials or inputs, manufacture its products, sell them and use the money received to pay the lender back. It can also be the case that paying suppliers upfront gives businesses better pricing, and manufacturing funding can make this possible.
Import Funding
Import funding is a type of purchase order funding that businesses that import inputs from another country can use to secure the materials. It covers 100% of the import costs, including duties and logistics. Similar to purchase order funding, this type of instrument allows you to fulfil your orders completely before needing to pay back the short-term loan.
Invoice Purchasing
It’s a familiar sight; the business owner issues an invoice, but the customer pays (much) later than anticipated. Yet, the entrepreneur is just as reliant on the influx of cash as always.
Invoice purchasing solves this cash flow constraint by stepping in as the expected funds while you await payment.
Contract Finance
Contract finance steps in when there is a contract between a small business and a credible entity to supply goods and services. Essentially, purchase order funding can be seen as a once-off order that needs to be fulfilled, whereas contract finance is an agreement between the business and its client, such as a government entity, to fulfil a recurring order for a specified time.
However, this type of funding can only be obtained if the business can show that it has been issued by a credible entity and that the contract is valid.
Purchase Order Funding
Perhaps one of the most well-known types of funding that is not a traditional bank loan, purchase order funding helps fill the gap in cash flow that might exist between receiving the order and fulfilling it.
Purchase order funding can only be provided if the small business can indicate that the purchase order has been received from a credible company. This can be an entity operating in the public or private sector.
Applying for Funding Through ProfitShare Partners
ProfitShare Partners offer funding from R250 000 to R10 000 000. It promises fast, flexible financing for its clients.
Criteria:
Businesses need to meet the following criteria when they apply:
- Must be CIPC registered.
- Must have a valid contract or purchase order from a credible institution.
- Have a need for at least R250 000 in funding.
Small business owners from any industry who need to fulfil an order and require support from any of the above can apply.
Applying for funding through ProfitShare Partners is a seamless process that can be completed online.
Create a profile on their website by clicking on the “Apply Now” button. Complete the form and provide any information that is requested. You will know within 48 hours whether your application has been approved. Applicants will then receive an obligation-free finance quote, which they can choose to accept or reject.
If accepting the quote, the applicant will be prompted to provide additional information. Finally, the applicant will receive their funds within days.
All you then need to do is fulfil your orders, and pay back ProfitShare Partners with the agreed-upon profit share terms as soon as your client pays.
