An alternative lender on the side of SMEs

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Lulalend founders, Neil Welman and Trevor Gosling
Lulalend founders, Neil Welman and Trevor Gosling
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Big finance and the little guy don’t usually see eye-to-eye. Lulalend was founded with one aim in mind: to bridge the gap between small businesses and easy access to capital to help their businesses grow.

Access to funding has been highlighted as the main challenge affecting SME (small-medium enterprise) growth in South Africa. In fact, the credit gap for SMEs in South Africa currently stands at $23 billion.

According to SAICA’s SME Insight Report, 90% of new jobs will be created by SMEs in 2030. That’s a big ask of a sector seen as high risk by most traditional lenders. The unfortunate reality is that for SMEs, smaller loans don’t equate to big profits. As a result, applying for business finance or credit is difficult, requires intensive paperwork and often requires excessive collateral.

Lulalend founders, Trevor Gosling and Neil Welman, recognised that being unable to access funding was holding South African businesses back. The business partners aimed to use technology to make business funding more accessible to the sector.

Lulalend was founded in 2014 as a purely digital solution. Cash-strapped SMEs frustrated by the red-tape, lengthy decision-making periods and low approval rates associated with traditional lending, could simply fill out an application online and be able to access business finance needed to grow their business in under 24 hours.

Today, alternative lenders have become a preferred avenue for the under-served SME market looking to grow their businesses through funding. Not only is the application process simpler, but often no collateral is required. Lulalend is the only alternative funding provider that gives SMEs access to up to R1,5 million instantly, without paperwork, restrictions or collateral.

This speedy application process is achieved through a state-of-the-art artificial intelligence (AI) model used to accurately predict how much finance a customer can lend without overexposing the client to risk.

By using machine learning, for example, Lulalend can identify trends most banks would have overlooked entirely to determine real business performance, without the necessary paperwork to prove it.

For SMEs, this instant access to business finance can be crucial. “We have made accessibility our biggest focus with a digital platform that makes it quick and easy for businesses to access funding in less time than it takes to drink a cup of coffee. The risk assessment and decision-making process is completely automated, which means applications can be approved faster, and funds made available in under 24 hours,” explains CEO Trevor Gosling.

Lulalend also offers small businesses the opportunity to apply for a business credit facility up to R1,5 million. This type of facility offers great peace of mind for small businesses who experience slower seasonal trading months. “As the fintech space has opened up in the South African market, it has provided small businesses with alternative finance options in order to build their business. Accessible finance will undoubtedly play a significant role in the growth of this sector,” concludes Gosling.

Its ethos of responsible lending has served the company well. Lulalend was a finalist in FNB’s Business Innovation Awards in 2017 and recently announced an additional round of investor funding amounting to $6.5 million. With the latest round of funding, Gosling aims to drive increased SME growth by improving Lulalend’s customer experience and making it even easier to access business finance.

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