PO Funding Capital’s Growth Finance is tailored to support small and medium-sized enterprises (SMEs) that have transitioned past the early survival stages and are now firmly entrenched in a phase of significant expansion.
The growth phase represents a thrilling yet demanding period for small and medium-sized enterprises (SMEs). This exhilaration stems from the heightened activity within the business and its dedicated pursuit of a growth-centric strategy. However, this phase can also be characterized by its challenges, primarily revolving around the intricate and formidable task of securing the requisite funding. Significantly, the quest for a funder who possesses a comprehensive understanding and appreciation of the distinctive growth strategy employed by a particular SME can be an elusive endeavor.
At this juncture, SMEs often confront a critical decision point. They may exhibit hesitancy in involving an equity funder, perceiving it as an extreme measure, and harboring a reluctance to cede ownership stakes in their enterprise. Conversely, traditional lenders, often renowned for their conservative lending practices, may encounter difficulties in comprehending and tailoring a financial solution that is aligned with the unique circumstances of the SME.
This is where PO Funding Capital’s Growth Finance steps in…
Why consider growth finance?
The following are common scenarios where a business might require Growth Funding:
- Acquisition of a competitor: You might spot an opportunity to acquire a distressed or retiring competitor, but banks rarely get involved in funding such acquisitions for SMEs.
- Expanding within the value chain: Your business could be in the transport sector but intends to acquire warehousing facilities, which is a unique context.
- Involving a BEE (Broad-Based Black Economic Empowerment) partner: Whether you want to bring a BEE partner into your business or they wish to invest in your enterprise, this isn’t a typical service offered by most banks, especially in the SME segment.
- Infrastructure expansion: If your growth strategy involves expanding your infrastructure, the usual specialized asset finance may not suffice, as it requires a different approach and facility structure.
- Purchase of business premises: If you aim to acquire your business premises but find that banks only offer a bond covering 60-70% of the cost, you might require additional funding to bridge the gap.
What is the operational framework of growth finance?
PO Funding Capital presents a structured financial approach, acknowledging the uniqueness of each growth scenario. This approach integrates a spectrum of their conventional funding products, encompassing options for long-term and short-term financing, or a blend of both. The overarching objective is to customize these financial instruments to precisely align with the distinctive growth requirements of individual businesses. Notably, PO Funding Capital’s Growth Finance prioritizes the delivery of personalized and meticulously structured solutions.
Minimum finance criteria for PO Funding Capital’s Growth Finance:
- Minimum finance amount ranging from R1 million up to R25 million.
- Businesses must be classified as small to mid-sized (SMEs) and have been in operation for three or more years.
- An annual turnover of at least R10 million is required. Alternatively, if the annual turnover falls between R5 million and R10 million, the business must be engaged in a current growth context, such as a contract, project, or acquisition.
For further details on PO Funding Capital’s Finance Criteria, you can refer to their official documentation.