Small business software solutions firm Xero has signed partnership agreements with local financial solutions firms Bridgement, Retail Capital and Lulalend.
Xero is a cloud-based platform for small businesses, with 1.4 million subscribers in over 180 countries.
The Xero ecosystem integrates with 700+ apps for businesses, providing SMEs with digital financial solutions.
According to the agreement, the three finance providers will integrate their digital platforms with Xero software to enable instant access to company records through API channels, making it possible to do a quick credit risk assessment for their clients, notes Xero.
The lenders will also be able to access applicants' financial information quickly and efficiently, cutting down on paperwork and fast-tracking the approval process, it adds.
Colin Timmis, general country manager at Xero SA, says: "Xero's mission is to help South Africa's small businesses thrive by removing the friction involved in accessing funds.
"A lack of capital is one of the biggest challenges impeding small business growth in this country. By integrating the latest business finance apps with Xero, SMEs will have access to real-time accounting data, and help them access much-needed capital."
The integrations, built on top of Xero's open API, will also help Xero's small business customers improve cash flow and access capital quickly. Accountants and bookkeepers who sit within the Xero partner community can also recommend these new lending apps to their clients, he adds.
SA's small to medium enterprises are crucial to the country's economy. It is estimated that SMEs contribute over a third (34%) to the country's GDP and make up roughly 90% of South African formal businesses.
To ensure SMEs are well positioned for growth and success, there needs to be fast and secure access to funds and capital, notes Xero.
Established in 2016, Bridgementoffers near-instant invoice financing and credit facilities to SMEs, to the tune of R10 000 to R1 million.
Its co-founder, Daniel Goldberg, says he saw a gap in the market to provide SMEs with an alternative to admin-intensive and prohibitive traditional bank financing options.
"A large number of businesses don't apply for funding because they are disheartened after many unsuccessful attempts, or because they don't understand the process. By partnering with Xero, we are able to leverage the API and innovations to make things even simpler in finance," explains Goldberg.
Since 2011, Retail Capital has provided SMEs with an alternative funding solution. The company says it has advanced more than R2 billion and has partnered with over 10 000 business owners, providing funding for growth.
Lulalend is a digital-only business that provides transparent and responsible lending to a wide array of clients. The lender is industry-agnostic, but most of its clients come from the distribution and manufacturing, online retail and professional services industries.
Lulalend founder Trevor Gosling comments: "SMEs are a hugely unfunded segment and banks aren't very proactive with funding to help them grow. The real-time assessment tools speed up funding decisions to give small businesses the capital they need to grow."
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