In this edition of Business Day Spotlight, we talk about small business lending during the Covid-19 pandemic.

Our host Mudiwa Gavaza is joined by Trevor Gosling, co-founder of alternative small business lender, Lulalend.

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Founded in 2014 by Gosling and Neil Welman, Lulalend is a tech first lender specialising in financing small businesses. The company uses its machine-learning platform to analyse company data and measure prospective lenders’ financial health and creditworthiness.

With loan amounts of up to R1.5m, Lulalend says it offers instant, automated decisions for smaller loan amounts and “rapid turnaround for even large lending applications”.

Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI
Business Day Spotlight host Mudiwa Gavaza. Picture: DOROTHY KGOSI

Gosling says they started the business after noticing that many small businesses could not get funding from traditional banks. He admits that this segment is risky to lend to, but that the company has been able to use technology to aid in making those assessments and so reduce the risk.

One of the biggest funding issues facing small businesses is the amount of time it takes for bills and payments to be made. Payment terms for supplying services and products, often come with 30, 60 or 90 day timeframes. This can be especially crippling to a small business that has to wait up to three months to receive money for services rendered, while business expenses continue to fall due.

Gosling says this issue became even harder to bear for businesses during the Covid-19 lockdown. In response, the company has launched Lulapay, a new service designed to help small businesses get their invoices paid faster. Business owners apply to Lulalend to have invoiced amounts paid sooner, with the lender taking on the burden of collecting payments from customers according to the original terms.

The discussion also gives some background on Lulalend and its business model; the impact of Covid-19 on lending practices and working capital management for businesses; advice on how small businesses can better manage their finances; and an outlook for small business in a post-coronavirus world.

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 Business Day Spotlight is a MultimediaLIVE production.

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