Increase vendor deals for BEE ratings

Process

• The corporate makes a comprehensive and company specific proposal
  
• Absa and the corporate sign a Memorandum of Agreement
  
• The corporate has a contract with the SME supplier (it is preferable that there is a trading history between the corporate and SME supplier)
  
• The supply of goods or services must be on a repeat basis
  
• If the corporate does not make use of purchase orders, the assessment will be based on a binding and irrevocable contract between the corporate and SME with clear deliverables and cash flow

The vendor finance then provides finance to the SME from the point a contract or purchase order is issued by the corporate, to the final step of invoicing.

Absa's head of Market Development for Small Business, Sisa Ntshona, says, "Essentially, this means that SME suppliers can take advantage of growth opportunities and expand their service to the corporates. We recognise the need for cash flow solutions for SMEs and our offering addresses this. It also provides an opportunity for SMEs to become better and more robust suppliers."

Benefits

• Corporates can acquire more goods or services from SME suppliers
  
• Corporates are able to leverage off better cash flow planning, reduce administration costs and burdens because of ad hoc payments to SME suppliers
  
• Corporates do not need to provide funding to sustain SME suppliers
  
• SMEs are financially better positioned to fulfil their contracts
  
• Corporates can allow for longer creditor cycles without negatively affecting SME suppliers