Near-instant invoice financing is giving small to medium sized enterprises (SMEs) a leg up by stripping away the hassle, time and challenges of securing traditional bank financing. FinTech company Bridgement’s first product to market has a record time of 2.5-hours from loan application to money landing in an SME’s account. It is a part of the wave of tech solutions to age-old problems faced by small businesses, including the dreaded cash flow crisis.
“When money is needed quickly – to cover salaries or pay suppliers between receiving payments from slow-paying clients – the time and burden of proof required to secure a bank loan is prohibitive. Many SMEs are overlooked for financing because banks find them too costly to serve and too difficult to underwrite,” says Daniel Goldberg, co-founder of Bridgement.
As a result, SMEs struggle to manage cash flow crises, pay staff at month end, and settle bills from suppliers on time. Alternative financing avenues in the past have included exploitative loan companies with complex interest structures and hidden costs. With newcomers like Bridgement, a member of the South African SME Finance Association (SASFA), SMEs see the exact, fixed rate that they will pay before agreeing to anything. If they pay it back early, they are rewarded with a discount and are not punished with cancellation fees.
Bridgement’s speed is due to its use of machine learning for credit analysis and decisioning. Businesses that use accounting software like Xero and SageOne, are able to connect to the platform directly – no documentation is required. “Once an application is complete, our tech accesses and quickly analyses thousands of data points to decide what size business loan should be granted, enabling us to transfer the money speedily,” says Goldberg.
Bridgement recently secured an investment through the Capricorn Capital Group, an associate of international investment group Yellowwoods, best known for their ownership in Nandos, Hollard and Clientèle. With the capital injection, Bridgement is well positioned to reach their goal of issuing R1-billion in SME finance over the next five years.
“We are all about enabling growth for SMEs – helping them improve cash flow to take on bigger projects with longer payment terms. This requires speed of access, simplicity and transparency of terms. Our invoice financing product delivers that,” says Goldberg.
Bridgement offers credit facilities of R10 000 to R1-million. Registered companies that have been trading for longer than six months can complete the online application on their website – www.bridgement.com.