South Africa has far more SME funders than it did a few years ago, yet access to finance remains out of reach for many businesses. The OECD’s South Africa country note puts the MSME financing gap at R350 billion. Funders have more than doubled, from 148 in 2018 to over 300 in 2025, but thin credit information and too few finance-ready entrepreneurs still hold lending back.
Picture a retailer offered stock at a good price on Tuesday, with payment due Friday. That is the worst moment to discover the latest figures aren’t ready, or that basic company records are scattered across old email folders.
Get the funding file in order
The South African SME Finance Association (SASFA) recently made the case for building a “funder bench” before capital is needed. The guide suggests that an SME should be able to send its funding pack, essentially the key financial and business information a funder will need, within 30 minutes, with bank statements and recent management accounts readily available alongside current company records, tax information, and a cash-flow forecast.
The aim is to have enough current information on hand to give a funder a clear picture of the business without starting from scratch. SASFA suggests keeping 12 months of bank statements, management accounts no older than 90 days, and a rolling 13-week cash-flow forecast ready, alongside director identification, current CIPC and tax documents, and a short summary of what the business does, who it sells to, and why it may need capital.
Information on key customers and suppliers, along with two or three client or supplier references who would be willing to take a quick call, can also be part of that pack. Different funders will ask for different things, so there is no universal checklist that guarantees a quick decision. Keeping the basics up to date simply means less has to be found or rebuilt when funding is needed.
At Merchant Capital, we start with how the business is trading and what its revenue looks like. Most applications are handled digitally, and the process is designed to move within days. That can suit owners whose businesses do not have a long trading history or the level of financial records and security a bank may usually ask for.
Show how the business trades
Cash flow and revenue carry a lot of weight in a lending decision, while collateral generally plays a secondary role. For the owner, preparation therefore goes beyond collecting documents. The lender needs to understand what is actually happening through the business account.
Purchase orders and receivables provide good context. However, we still need to consider how the business has traded historically and whether expected income is likely to translate into banked receipts that can support the funding.
This is worth understanding before making an application. If the owner needs capital to buy stock for an order, there should already be a clear view of when the supplier must be paid and when the customer is expected to pay.
Work out the funding need early
The businesses we see use funding for everyday commercial reasons, often because cash needs to move before revenue catches up. Working capital and stock purchases are common, as are supplier payments and contract fulfilment.
Waiting until the bank balance is under pressure makes those decisions harder. An owner who has already thought through the funding need can approach the conversation with a clearer idea of what the money is meant to do and how the business will carry it.
Having everything ready does not get a business over the line on its own. The numbers still have to work. But when they do, there is little value in losing days because statements are out of date or company information still needs to be tracked down.
Alternative finance is often chosen when time is tight. Even in a faster process, the lender still has to establish whether the business can afford the funding.
Know who you would call
SASFA’s broader funder-bench idea is useful because an SME does not need to wait for an urgent funding requirement to learn how different providers work.
Business owners can speak to potential funders in advance and find out what information they would need if an application landed tomorrow. Keeping that information current takes far less effort than reconstructing it when a supplier, customer, or opportunity has already imposed the deadline.
When the funding deadline arrives, the conversation should be about the business, how much funding it needs, and what the money will be used for, rather than trying to track down missing documents
By Franco Helsinga, Head of Credit, SME at Merchant Capital