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The Ultimate Guide To Funding For Women’s Business In South Africa

The Ultimate Guide To Funding For Women's Business In South Africa

Introduction To Funding For Women’s Business

According to SME South Africa, 47% of South African small business owners are women. That’s a 6% increase in the female-to-male entrepreneur ratio. We know that SMEs are a major driver of job creation, so on paper, the future certainly looks bright.

That’s until you factor in that 70% of new businesses fail within the first 18 months. It’s clear that access to funding for women’s businesses remains a big challenge.

According to one survey, 88% of small businesses are self-funded, have never applied for funding and don’t actually know where to apply for funding. Plus, most claim access to finance is their number one challenge.

So what can be done to support female business owners in South Africa? The answer seems remarkably simple. Funding. More specifically, it’s access to the right information that empowers female business owners to make informed financial decisions.

We’ve put together this handy guide to help you understand how funding can be used to help your business grow.

Challenges Affecting Female SMEs

There is nothing more satisfying than running your own business. But being your own boss does come with its own challenges.

The main business challenges faced by SMEs are:

  • Access to finance and credit
  • Cash flow management
  • Marketing
  • Red-tape
  • Access to support
  • High startup failure rate
  • Access to markets
  • Skills shortage

Business funding exists to help deal with some of these challenges. As an entrepreneur and business owner, you need to understand the unique challenges that face your business and determine what kind of business funding can help you overcome them.

Clearing The Fog Around Business Finance

Financial literacy and easy access to information about business funding is key to solving many of the challenges facing your business. You need to know how to plan, budget, invest and have a working understanding of the financial health of your business.

It’s also important to know that applying for business finance is not an indication that your business is struggling. Most, if not all, businesses that have been operating for some time need capital in order to scale.

Funding For Women’s Business In South Africa

In the past, SMEs had to rely on banks to provide a range of financial services, but because of restrictions and tough requirements, actually walking away with the funding needed was difficult. Now there is a range of alternative lending options for SMEs, each with their own pros and cons.

Some forms of finance like bootstrapping, angel investors, venture capitalists, crowdfunding and accelerator programs are only applicable to new businesses and startups.

For existing businesses, funding options include secured and unsecured loans, bank finance and government grants. Funding intended for a specific purpose, such as a bridging loan or purchasing equipment, carry their own minimum requirements.

Alternative lenders have proven a popular and more flexible option for South African SMEs looking for easy access to finance.

Business Credit

Business credit can be a great tool for growing your business and it’s a lot more flexible than a small business loan.

A business credit facility works in the same way as a credit card, which can be a huge advantage for SMEs. It’s always there when you need it, which is great for peace of mind, and means you don’t have to withdraw from your personal funds when you need quick access to working capital.

And the biggest advantage – you only need to apply once.

Using Your Funding

There is a common misconception that only new businesses require funding. The reality is that business funding can be applied for at any stage in a business’s lifespan and can be used to meet many different needs.

Examples of ways you can use your business funding include:

  • Expansion of your premises
  • Hiring additional staff
  • Equipment purchase
  • Marketing
  • Buying Inventory
  • Managing Cash Flow

What you do with your business funding is ultimately up to you. As a business owner, it’s your job to ensure you know exactly what you need funding for and how to use it to achieve your business objectives, whether it’s growth, purchasing seasonal inventory or buying the equipment needed to scale.

Understanding Debt

As a business owner, you need to understand how your money can work for you. This includes your business debt.

It’s important to understand that there is a difference between good debt and bad debt.

Bad debt does not influence your business growth. In fact, it does the opposite. Drawing on your credit card to cover day-to-day expenses, luxury items or depreciating assets like a vehicle, counts as bad debt.

Good debt works for your business. Business funding that contributes to the growth of your business or ultimately increases your net worth can be considered good debt.

The Secret To Growing A Successful Business

Accessing finance to grow your business is a big step in the right direction, capitalising on that investment is another smart move. But running a successful business is so much more than maintaining liquidity. It’s about why you decided to do it in the first place.

Research shows that 74% of entrepreneurs start their own businesses because they want to pursue their passion and make a positive impact in South Africa.

We’ve handpicked some inside secrets from successful female SMEs to help you along the path to success:

  • Tell your brand story in your marketing – it will make customers (and investors) love what you do
  • Define your values and let them drive your business activities
  • Connect and engage with your customers and they will return for more
  • Get tech-savvy and embrace technology
  • Be a disruptor and show the world what makes you different
  • Network as much as possible and share your success story
  • Never sell yourself short – be proud of what you have achieved
  • Pay it forward and mentor other women business owners like yourself

Grow Your Business With Lulalend

Lulalend is dedicated to helping South African businesses grow and that includes providing access to funding for women’s businesses.

According to our own market research, 59% of SMEs say access to credit is their biggest business challenge. With Lulalend, you can access up to R1 million in business funding or business credit in as little as 24 hours. Simply apply online and complete our paperless, obligation-free application and we’ll be in touch with your answer.

If you have any questions, get in touch with us today and we’ll help you find the business funding solution that’s the right fit for your business.

Visit to apply.

See how we helped Mondisa Goduka, CEO and founder of Kids Cooking Club Cape Town, with access to finance to grow her business.

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