Hi, I am Greer. I am the Head of Legal at Lula. I am responsible for all legal and compliance functions at Lula to ensure our employees and customers are both fully informed about the products we offer and that we do so in compliance with all regulatory frameworks applicable. I work closely with all teams at Lula and am available to assist customers with any legal query they may have. Here are some insights from my desk.
How to make sense of Lula’s terms and conditions for small businesses.
Lula Lend is strictly a Small Business Funder looking to assist businesses, like yours with your cash flow challenges.
Our agreements are, however, not structured as a standard loan agreement but rather an advance. We assess our client’s business and identify the business’s ability to generate revenue in the future and see this ability as an asset of the business. We are, in effect purchasing businesses’ future revenue to allow them immediate access to those funds.
This is not a blanket purchase of all future revenue and is limited to the repayment amounts set out in the repayment schedule. The future revenue we are purchasing is limited to the repayment amounts. Lula Lend does not claim an outright cession of all your future revenue.
As a result of how our agreements are structured, being a purchase and sale agreement, as opposed to a loan agreement, our agreements are not credit agreements as defined in the National Credit Act. This Act is, therefore, not applicable.
We have structured our agreements this way to support our SMEs. We do not charge interest but rather a set cost per instalment. These costs are detailed in the quotation we provide before entering into the legal agreement and in the legal agreement itself. This is to ensure our SMEs are fully informed about the cost of the funding provided.
There are no hidden costs. In doing so, we encourage transparent and responsible lending, ensuring our SMEs are fairly treated and that the reputation and sustainability of the SME Finance Sector are maintained. We are a member of SASFA, the South African SME Finance Association, which encourages each SME to clearly understand the SME finance product and the benefits of such product for the SME when applying for an SME Finance Product.
For more information on SASFA, you can visit their website at https://sasfa.net/.
We have registered with the National Credit Regulator but have done so as a checks and balances procedure to ensure transparency with the Regulator.
We are not a credit provider.