You own and operate a small retail business – it could be a pet store, an arts and crafts shop, you name it. You’ve got the logo, the shop, the stock. However, if you want to grow your business, access to working capital is key. But before funding can happen, your business needs to show it’s fundable – you need to build a resilient model that attracts both customers and capital.
South Africa’s retail sector is gaining traction again, with Trading Economics reporting a 7% year-on-year growth in January 2025. That’s more than double the rate seen the month before. That means your customers have renewed interest, which is great. But buying behaviour is changing. Customers want convenience, flexibility, and brands that can meet their needs across multiple channels.
To leverage this and adapt your business to meet demand, you need funding. But what do funders look for? While turnover gets your foot in the door, funders often take a wider view of a business before loaning them money. As an award-winning small business funder, we can tell you that we look at a few things: how your revenue is earned, whether your business model is sustainable, and if there’s potential to scale.
So, if you wonder how to get business funding, the better question might be: how do you make your business more fundable? Here’s the inside scoop.
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What Business Funders Really Look For
Aside from revenue, business lenders check a couple of things to see if a business is fundable. We want to see how your business operates. Is it resilient? Can it adapt to change? Is the current success built on a model that can continue to perform?
Let’s take a simple example. A pet store with solid walk-in sales and repeat customers might seem like a safe bet. But if those sales rely on just one income stream, we see risk. If anything disrupts foot traffic or supply, revenue could quickly decline.
Now compare that to a similar business that offers online shopping, grooming services, and subscription deliveries. That business hasn’t changed its identity, but it has added new revenue streams, created customer convenience, and built in more stability. It’s better positioned for long-term growth, and that makes it more attractive to funders.
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Why Multiple Revenue Streams Matter
One of the best ways to improve your fundability is to build out more than one income source. If you rely on a single product or channel, you are vulnerable to change and exposed to risk. Funders want to see businesses that can absorb shifts in the market and continue to grow.
Diversified revenue gives your business a safety net. It also signals to us that you’re thinking ahead. You have moved out of being reactive into a more proactive space, and you’re building something that can evolve.
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Online Sales Show You’re Ready to Scale
If your retail business operates both in-store and online, that’s a strong indicator of scalability. It shows you’re not limited by physical space or location. You’re reaching more customers without a proportional increase in overheads.
While online sales do come with costs like platform fees, fulfilment fees, and courier costs, these are typically variable expenses. That means you can grow your revenue without a huge rise in fixed overheads. A clear signal to funders that your model is built to grow efficiently.
This kind of setup gives us confidence that, with the right funding, you can grow faster and more efficiently. Adding digital channels also means you’re capturing more data, which helps you make informed decisions – another green flag from a credit perspective.
Operational Visibility Matters
Funders also look at other key fundamentals: cash flow management, controlled overheads, manageable debt levels, and strong stock systems. These elements show us that your business is well-managed and built to withstand pressure.
Businesses that have a clear picture of how they’re performing, and where improvements can be made, are often better equipped to handle growth. When we assess applications, we look for signs that the business owner has control and oversight. That kind of operational maturity is just as important as revenue.
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Business Funding Should Support Your Growth
Funding is more about enabling your momentum, and less about plugging gaps. It’s a strategic tool that gives you room to grow, to try new ideas, improve operations, and respond to demand faster and with more confidence.
At Merchant Capital, we work with business owners who are ready to take the next step. We offer asset-free financing that is fast and flexible, and designed specifically for South African SMEs.
How to Know if Your Business Is Fundable
If you are considering applying for funding, it’s worth stepping back and asking a few important questions:
- Does my business rely on a single income stream?
- Have I built any digital channels or alternative sales models?
- Are our operations efficient and scalable?
- Do I have clear visibility into my numbers and key performance areas?
If you’re unsure about some of these, don’t stress. You’re not alone. Many successful businesses are still evolving. But the first step to being a fundable business is recognising what needs to change, and taking steps in the right direction.
We Back Businesses with a Growth Mindset
At Merchant Capital, we’ve supported more than 60,000 South African businesses with over R15 billion in funding. What these businesses have in common isn’t always size. Often, it’s mindset. They’re led by owners who are ready to take the next step, and who understand that building a fundable business takes foresight and commitment.
If you’re planning for growth, and you’re ready to explore your funding options, we’re here to help.
Want to Access Asset-Free Business Funding?
Speak to us today to find out how to get business funding that’s designed for your stage of growth. Let’s unlock the next chapter of your business journey, together.
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FAQs
What is the fastest way to get business funding?
The fastest way to get funding is to work with a lender that understands small business needs and can assess your application quickly. At Merchant Capital, we offer fast, flexible funding with minimal paperwork, and decisions made within hours. If speed matters, speak to us today and let’s help you move forward.
How can I make my business grow more?
Growth starts with a strong foundation, clear visibility of your operations, and access to working capital when you need it. Whether you’re investing in stock, staff, or systems, flexible business funding can unlock the next phase of growth. Chat to us to see how we can support your plans.
What is the best way to fund my business?
The best funding approach depends on your goals, cash flow, and how much flexibility you need. We offer tailored, asset-free funding that gives you access to capital without giving up equity or putting up collateral. Enquire now to find the right solution for your business.
What is the best source of funding for a business?
Traditional banks can be slow and difficult for SMEs to navigate. At Merchant Capital, we focus on small and growing businesses, and offer fast, accessible funding built around your unique needs. If you're ready to grow, reach out and see what’s possible.
