Financial readiness is key to success


Darlene Menzies, CEO of Finfind

Simple tip to put you at the front of the queue to secure finance

Staying organised and on top of paperwork can be tricky for entrepreneurs who already have dozens of other balls in the air. Keeping track of financial documents and then needing to have up to date copies on hand when requested by lenders is a business owner’s worst nightmare. While securing finance may be critical to your business’s survival and growth, the thought of getting all the documents needed together can seem like a huge mountain to overcome.

Darlene Menzies, CEO of Finfind, South Africa’s leading online access to finance solution, encourages business owners to put a simple discipline in place in their business that will ensure that you are always well positioned to raise finance whenever you need it. Applying for funding takes time, and time is usually the very thing you don’t have when you’re needing finance. It make sense then that you should do everything possible before engaging lenders to be finance ready. Good preparation on the part of the finance seeker expedites the application process.

Here’s the tip, it’s really simple but is very effective. Start an electronic folder today, preferably stored online, and call it something like ‘Finance Readiness’ or whatever works for you. Then create subfolders with the names of the documents that need to be stored in each (see below). It may seem like a real schlep to set this up, especially if it’s not immediately needed, and it will also take time to find, and in some cases to compile, all the relevant documents you need – but once it’s done it’s very easy to maintain and will really help your business.

Some of these documents are also often needed for tender submissions or when applying to be listed on government and corporate supplier databases, so having them easily accessible in one place and up to date is really handy. Make it a habit to keep the folders that require latest documentation up to date on a monthly basis e.g. every month file the latest management accounts in the folder etc.

What documents should be stored?

  • Company registration documents
  • Certified copies of all owners’ identity documents
    • if married in COP then their spouse’s ID is also required
  • Updated copies of each owner’s personal statement of assets and liabilities
  • 6 months bank statements for all business bank accounts
  • Business proof of residence (FICA)
  • Latest signed annual financial statement
  • Up to date management accounts
  • Cash flow projections for 12 months (including how you will spend the capital raised)
  • Business plan / Business profile
  • Proof of collateral, if you have collateral (i.e. documents of any investments, your bond statements if you are able to borrow against your home, information on the surrender value of any policies you have, etc.)

This is not an exhaustive list for all lenders – some lenders may require further documents and on the other hand some lenders won’t require some of the things listed above. This list covers at least 80% of what most lenders will request from you. Having these documents immediately on hand when requested will be a very positive sign to the lender regarding how you run your business as this document availability is not common among SMME finance seekers.

Why the cloud?

Storing your important company documents online is easy, convenient, affordable and safe. It’s a better option than keeping them on your computer or office server, which may not always be backed up and can get stolen or damaged. In addition, if you use cloud storage, then any team members who need to access the information can do so at any time and from any device.

If you aren’t currently using cloud-based storage to store important business documents then it would be a good idea to start. When you start out and your storage needs are not huge, always opt for free storage options. You can always start paying for more space later when/if you need it. For example, Dropbox provides free storage for up to 2GB (for individual use) and you can then buy more space as you need it from there. Dropbox Business starts from US$12.50 per user/per month for 2TB of space (starts at 3 users billed annually).