With the growth of small and medium-sized enterprises (SMEs) in Africa, structured non-bank financing has also been on the rise. This is because the banking sector has proven not to give timely and required solutions to small businesses need as they have continually failed to meet the banking requirements which is quite intense.
For a small business to secure a bank loan, it has had to provide physical securities such as assets including, car ownership logbook, Land title deeds or equity to stock and bonds a requirement small business enterprises have not managed to provide.
Banks have also hyped their interest rates which range from 14.5% to 31% on both personal and business loans.
In Kenya for example, it was not until the Government regulation entailed that banks offer loans not exceeding 14.5% that Banks around the country dropped their interest rates.
In anticipation of more persons and business applying for loans, banks have also put in place a complicated procedure required to follow to acquire loans to reduce high credit making the process more tiresome and complicated.
Small and medium-sized business enterprises (SMEs) requiring regular and fast financial solutions have been forced to depend on instructional financing to meet their needs.
Structural financing is an approach to finance that targets to provide solutions to business more so small and medium-sized enterprises (SMEs) which require financial solutions that cannot be catered for under conventional financing. These include banking or acquisition of loans from other financial institutions.
Other business entities such as big corporations may also require structured finance as they often require large sums of money in intervals that financial institutions cannot provide in form of simple loans. Big corporations usually opt for structured financing as this provides for their financial solutions without having to be catered on each year of their financial statements.
Advantages of structured finance over conventional financing.
1. Fast, Easy and Simple
From the process of application to getting payments done structural financing is simple compared to other financing solutions. Momentum Credit takes this further as it offers to finance within 24 Hours upon request. Other financing solutions such as banking, however, require you to wait for periods such as 7 days or even 14 days and may end up getting the loan as late 21 days after application. This also is not guaranteed. This is not helpful for small and medium-sized enterprises as they require instant financing to provide solutions to problems they cannot project in their financial statements.
Structured financing is also easy to achieve as it does not require extensive procedures. At Momentum credit, for example, you do not need to open an account to achieve most of its structured financing options. These include invoice factoring, Logbook loans, APGs Bid bonds and performance bonds.
2. Lesser Requirements
Structured financing also requires less documentation and paperwork. While banking may require you to fill pages of loan application papers structured financing companies like Momentum credit allows you to access fast cash though methods of communications as simple as giving them a call.
When it comes to financing options for small and medium-sized enterprises, collateral is an important factor to put into consideration. This is because businesses with lack of physical assets such as land title deed or any indication of possession of physical asset can limit their access to loans.
Structured financing, however, provides instant solutions to these challenges as it does not require this. Business needs are solved timely and this motivates both the business to grow as cash restricts are not a challenge anymore.
Momentum credit can offer an invoice factoring solution of up to 85% cash on all approved invoices and up to 5,000,000.00 to car logbook loans within 24 hours without any collateral. This is a solution to all business that finds themselves in need of cash on tight and regular timelines.
Moreover, Momentum credit gives you more credit advances as you grow meaning the more they sort your business needs the more it grows thus the more possibilities you get. This on its own is a win-win situation.
Momentum credit has been instrumental in the provision of financing options to provide solutions to both small and medium-sized enterprises as well as individuals to cater for their different financial needs.
This is also not forgetting their timely, convenient and reliable operations. Momentum Credit also focuses on ensuring that Small and medium-sized enterprises in Kenya get access to cash to have immediate and exponential growth expanding their possibilities just as they believe in their vision statement.