Karl Westvig the Chief Executive of Retail Capital. Photo: Supplied

DURBAN - Two Cape-based companies have joined forces to ensure that small and medium-sized enterprises (SMEs) will have greater access to funding.

SME funder Retail Capital and asset finance firm First Asset Finance have combined their expertise to offer more funding and support to small businesses across South Africa, that are growing, despite tough economic times.

"Any business that invests in growth will survive despite the state of the economy. Tough economic times by no means indicate that you should stop investing in your business" said Retail Capital Chief Executive Karl Westvig. 

He added "In fact, it’s even more reason to make changes to boost your business’s growth ‒ whether it’s refurbishing, acquiring new assets, expanding your premises or building on the marketing of your product". 

Currently, according to Retail Capital CFO Guy Hosking, banks are very tight on the rules and the support they provide for small businesses. The company has provided almost R2 billion in loans to date to around 10 000 local businesses, predominantly retailers and restaurants.

"If banks are not helping to boost SMEs with funding, it is up to non-bank lenders to take up that slack," explained Hosking.

Hosking added "Ultimately, our goal is to have a range of funding products to service all SMEs. Adding this new finance product is a big step in that journey". 

The partnership will provide SMEs with funding options in various areas of their business. Westvig explains that the products from both companies complement each other seamlessly, with First Asset Finance offering a natural product extension to Retail Capital’s portfolio of funding and insurance options supporting SMEs based on their cash flow.

Retail Capital’s core funding product is a shorter term, unsecured and more expensive product, while First Asset Finance offers secured funding for the long-term at a lower cost. That said, both are very beneficial for business. 

According to Westvig, a restaurant, for example, might need funding to put in a new kitchen which would be asset based, but they might also need cash flow funding to grow in the interim.

Director of First Asset Finance Mark Dowson says that the company has provided asset finance to more than 2500 business owners throughout South Africa to date. Historically, First Asset Finance has predominantly served the medical sector, but the company took a strategic decision to replicate its product for other industries such as manufacturing, packaging, engineering and printing. 

Dowson and company Director Jason Sive believe that the logical next step is to expand into additional sectors. This is where Retail Capital comes in. 

"By joining the Retail Capital team, this now provides us with a springboard into their vast network of customers and partners who require an asset based finance product to enable their businesses to grow," said Dowson. 

The transaction between the two companies took place late last year, and will see them sharing a combined office space from the end of February. The merger is set to accelerate growth for all parties involved, while offering exceptional value to the SME market across all sectors.

In addition to the merger, Retail Capital will also be adding a new insurance product that will provide a built-in safety net for all business partners. This will include business interruption cover in the event of a fire or flood.

BUSINESS REPORT ONLINE