There is no debate on how much information you should know, while running a small or a medium-sized business, SME. This is because you need to optimize your business to use the least amount of recourses for the maximum results, this is to ensure you get the best out of them.
Advance Payment Guarantees, APGs, are part of what you need to be informed about, as they form a very vital part in helping you boost your working capital, and provide financial help to monthly business maintenance needs.
Here is why Banks are not the best option
1. Banks Are Slow
To say banks are slow is, to say the least. Banks can keep you waiting for an APG until you get it when you have no use and need for it. While other financial institutions take little time to serve you, banks will involve a lot of procedures, contain lots of requirements in order to process you APGs letting you down by slowing down the whole process.
While this is the case, banks will always want you to depend on them and have no alternative. This is by creating more need for their services tying you to a roller coaster form of need.
This has now led to the rise of SME solutions in Kenya and Africa as a whole. Momentum Credit, however, is not only one of the many SME solutions that are available to your business. With a commitment to ensure timely delivery, Momentum Credit focusses on fast and reliable services. This is why most of our services are delivered in less than 24 hours to ensure the least possible time frames.
2. Banks Interest Rates are High
Banks have not only high-interest rates on APGs but on almost all products. Aiming at making a profit, banks usually charge high, unreasonable amounts of profits and at very tight and inflexible payment schedules.
This makes it especially difficult for SMEs and other growing business access and enjoy their services. Other financial institutions, on the other hand, use the compounding effect to charge more interest in a long period of time with the seemingly little amount of interest.
This has become even more rampant with the introduction of the limit on which they can charge interest to be 15% by the Central Bank of Kenya.
At Momentum Credit, we have optimized our services for our customers. This is because we not only focus on making a profit but making a partnership and help you achieve your goals. All our interest rates are friendly to SMEs and we also offer flexible repayment periods to APGs and all other products we offer.
3. Lot’s of Paper Work when dealing with banks
Due to the volumes of requirements, banks discourage SMEs. Imagine having to fill out forms for every action or service to be offered. This takes a lot of time to fill leave alone to process and get feedback.
This is a great pain on the back. Filling forms is not only a tedious process but demotivating when you imagine of receiving negative feedback. This leaves banks to corporates that are big, unmanageable and do not care much about growth, but for an advancing SME, productivity means both efficiency and effectiveness. This rules out bureaucratic institutions such as banks.
4. Let’s talk about Collateral
Whether physical assets, liquid or any other form of collateral, banks usually require securities for most of their transactional services. In case you are not asked for collateral directly, referees and guarantors are usually kept and contacted in case you fail to adhere to their strict guidelines.
This is however mostly not attained by many SMEs as they often find it very difficult to raise the required collateral. By having a different approach, SMEs are now able to access Working Capital Solutions which are affordable and accessible to them leading to growth.
It might sound cliché, but information is power. This is because it is really necessary when doing business.
While banks too are forced to adjust to fit the current market trends, Other financial institutions will always end up providing better, more advanced and efficient services. This is through their ability to adapt and iterate, finding the best solutions to both SMEs and other businesses that are on the rise in Africa.
Momentum Credit, however, focusses to cover all your invoice financing needs, as well as other Working Capital solutions such as guarantees.