Sound financial management key to unlocking SME fundingThrough the Covid-19 pandemic and events such as the July 2021 unrest, there was a suite of public and private sector financial support for SMEs. Many SMEs were able to access much needed this relief, but some encountered roadblocks in their attempts as they were either non-compliant, could not interpret or meet mandatory criteria/conditions. Source: www.pexels.com Andiswa Bata, co-Head, SME at FNB says an entrepreneur can easily register a business and get a bank account activated within 24 hours through digital platforms, allowing them to develop a financial footprint and that enable a financial institution (e.g., a bank) to assess the health of a business for funding purposes. Sound financial literacy and management helps to unlock opportunities for SMEs, minimises risks and enables them to have access to finance and credit, an enabler for SME growth in the country. Furthermore, it is important to understand that all lending activities and requirements have to adhere to rules and regulations governing lending in the country. Accordingly, banks also follow and comply with these laws in all their lending activities. “A common requirement that puzzled many small businesses during the onset of the hard lockdown was whether they were in good financial standing prior to the pandemic or not,” says Bata, as she unpacks what banks consider when determining a lending decision. Some of these are:
“This makes it essential for SMEs to understand financial management as well as keep accurate and up to date financial records. Fortunately, there are plenty of resources available to SMEs to guide them through this journey” concludes Bata. |