How small businesses can plan for the holiday season


Although the South African economy has shown signs of recovery, the true cost of the COVID-19 pandemic and civil unrest in July this year has yet to be calculated. It is against this backdrop that many small business owners hope to regain lost ground in the months to come.

Many SMEs are torn between having to end a tough year on the highest grade possible by making sure the marketing messages hit the mark or investing in capital spending that will put them ahead of the pack in early 2022.

The crux of the matter is whether or not they have access to the cash reserves needed to avoid making choices that will delay them into the new year. It is a reality that most South African SMEs cannot set aside funds to meet needs or when additional expenses are required.

One way to profitably access cash is to consider a corporate finance option that offers a deferred payment option during the busiest times of the year.

“We have seen the positive impact that relief measures can have on businesses in need of additional support during the Covid-19 pandemic. Deferred loan payments, commonly referred to as “payment holidays,” are one way to give businesses support, flexibility and stability, says Tom Stuart, marketing director for SME funder Lulalend.

Deferred payment periods generally cover the suspension of payments of principal and interest for a predetermined period of time. Lulalend’s 60 Day Deferred Refund Offer allows all new customers to receive trade financing and not have to worry about starting repayments for 2 months. During this period, no interest, monthly administration fees or the like will accumulate.

Taking a payment holiday, under South African law, will not affect a company’s credit rating, as long as this “holiday” is recorded on the supplier’s system so that it is not considered to be. non-payment.

“A responsible loan is essential for the payment holiday to work and SMEs considering taking advantage of it must be in good standing, which means being able to service current debt, having a good credit history. solid and up to date with other loans or credit payments, ”says Stuart.

It is also essential for a small business owner or entrepreneur to showcase the continued growth of their business and how they plan for it for the future. A plan that involves streamlining operations, improving efficiency and long-term profitability; in addition to plans to increase revenue, a business will get the support it needs.

Mr. Munangiwa Tshikovhi from MNT Consulting, talks about their experience with Lulalend. “Lulalend’s repayment leave gave us access to the funding we needed to get our project started immediately. The deferred repayment period allowed us to focus on our business and prepare to repay the repayments with the income generated by the project. The whole initiative has given us a leg up on the competition as we move towards 2021. ”

Accurate and up-to-date cash flow forecasting means creating a rolling 12-month spreadsheet and committing to updating it every month. This way, businesses can anticipate cash flow shortages and be able to plan for when they will need to rely on donors to provide temporary financial support.

About Lulalend

Lulalend, South Africa’s leading online provider of short-term business finance, offers a fast and seamless lending experience to South African SMEs. The company understands the financing challenges faced by local SMEs. Their products, based on proprietary AI technology, are specially designed to make it easier for small businesses to access vital working capital within 24 hours. Their mission is to give businesses and entrepreneurs across South Africa the capital they need to grow.

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