DURBAN - Standard Bank and Merchant Capital have partnered to offer small and medium businesses (SMEs) a working capital solution.
Together they will offer SMEs capital by allowing them to access to upfront cash advances which will be repaid through their incoming point-of-sale receipts.
The financing solution from these two companies is aimed at SMEs that have a point of sale device as well as twelve months of trading history. Another prerequisite is the SME must have a monthly average of more than R30 000 in card sales.
The capital will be available to the SME within a space of hours as long as the business provides Merchant Capital with all the necessary documents. Merchant Capital underwrites the cash advances.
Financing will be connected to the monthly point-of-sale transactions of the SME that will be getting the capital. Merchant will take an agreed percentage of all future card sales until the money that has been given in advance is completely paid off.
Standard Bank said that they wanted to work with Merchant Capital because they have built up a good track record in the retail cash advances space.
Andrew Wilmot, the Head of Merchant Solutions at Standard Bank, said: "The agility of Merchant Capital Advance will bolster our ability to serve business clients by providing a new transactional solution that further complements the success we’ve achieved with SnapScan."
Dov Girnun, the CEO of Merchant Capital said that the agreement is a transformational deal in South Africa's developing financial technology sector.
Merchant Capital started in 2012 as an alternative solution to retail-focused SMEs that were looking for capital.