Funding under Covid-19 Context
– Our New Normal

“Funding in the Fog of War”

When we are no longer able to change a situation – we are challenged to change ourselves.” Viktor Frankl

  • Just as you’d visit a supermarket during the lockdown and find some aisles or products closed off as the supermarket restricts purchases to only focus on essential products – similarly, Spartan has paused its existing Who/What/How to adapt/change in the current context and focus on a New Who [Client Segments], a New What [Finance Products], a New How [Credit Process].

  • This Covid-19 Context is war-like [a World War 3, in a sense]. Many funders, including Spartan SME Finance, are asking ourselves – how do we lend in this war-time context, and how do we assess & approve in the “fog of war” …?

  • We will try to fund [in our new niches], despite our own fears …

  • The Covid-19 Context is fluid, unpredictable and the ripples are still unfolding. Therefore, our adaptive & creative changes that we’re communicating below can/will change or even have intermittent pauses as & when the “fog of war” becomes harder to navigate. As an indication of our willingness to still back entrepreneurs – we assessed, transacted & disbursed our 1st new loan under Covid-19 Context – within 24 hours after SA’s lockdown started. Admittedly, it was to an existing client – but still …

  • We will fund – despite our own fears …

See The New Who we finance here:

The New Who

See The New What we finance here:

The New What

See The New How we finance here:

The New How

  • In peace-time, Spartan had broad, loose boundaries on types of SMEs we would finance with debt. The only restriction was age [3years] and annual turnover [ideally minimum R10M pa, and R5M pa as an exception]. Understandably, in war-time, we’ve now had to paradoxically tighten our criteria – and yet be open minded.
  • In this “fog of war” there is no certainty, no clarity, no confidence.
  • Therefore, if Spartan is to fund at all, we had to make some difficult choices – as to who we cannot finance and who we can finance.
  • Please note: we do not finance amounts under R500k

Who can’t we finance?

  • Defined as any business ranging from “wanting/about to start” to “less than 2 years old”
  • Why not ?
    • A start-up is risky to fund in peace-time – but in war-time it is near impossible to fund [due to no certainty, no clarity, no confidence in this “fog of war”]
    • Spartan did not fund start-ups in peace-time. We cannot do so in war-time
  • Defined as businesses negatively affected by Covid-19 Context yet still thinking in Pre-Covid-19 mindset or thinking that things will quickly bounce back to normal …
  • Example
    • Any business wanting to pursue their Pre-Covid-19 expansion plans [whether buying business premises or opening a new branch or expanding their plant, etc] and wanting finance to still do so after Lock-Down
  • Why not ?
    • In this “fog of war” there is no certainty, no clarity, no confidence
    • Unless, expansion plans are counter-cyclical to Covid-19 Context [ie positively impacted by Covid-19 Context] – then those plans are now unviable for any lender to finance
  • Businesses in Distress
    • We understand that many businesses may fall under this scenario and need funding to carry them through the “fog of war” to the other side, but …
    • Whilst this is not possible in the traditional sense by most funders [especially due to the “fog of war” Covid-19 Context] – there are several Relief Programmes available from Government & Private Sector for businesses affected due to the Covid-19 Context
    • “Chronic VS Covid”
      • Distressed PRIOR to Covid-19 Context
        • Poor business health with pre-existing chronic condition prior to Covid-19 Context
        • These businesses may have difficulty accessing relief from some of the Relief Programmes – but should still try to apply where possible
      • Distressed DUE to Covid-19 Context
        • Distressed caused due to Lock-Down or broader Covid-19 Context
        • These businesses could access some relief from a few of the Relief Programmes
    • What has Spartan done to assist & guide SMEs ?
      • There are various Relief Programmes, from Government and Private Sector,to aid SMEs affected by the Covid-19 Context.
      • To assist & guide SMEs with easily navigating the various options from one-single-spot Spartan created, what we have called, a Relief Registry resource tool [with daily updates]..

Navigate and find out all the details here.

Who can we finance?

  • Defined as pre-existing businesses, with pre-existing products/services that will enjoy a boost now and sustain it beyond – due to a sustained change in buyer behaviours
  • Examples
    • e-commerce businesses delivering own or 3rd party products or services [online order & delivery model; edtech; medtech; remote care]
    • businesses involved in the data network ecosystem
    • businesses enhancing & securing WFH mode [tech and non-tech based]
    • businesses enhancing home convenience [tech and non-tech based]
    • etc
  • Defined as pre-existing businesses, with pre-existing products/services that are currently deemed Essential or Critical
  • Examples
    • medical products & services
    • healthcare services or supporting healthcare
    • food processing/manufacturing or supporting food sector
    • transport & logistics [for essential services eg medical, food, water tankers, etc]
    • water tanks
    • etc
  • Defined as pre-existing businesses, with pivoted products/services that becomes Essential or Critical now and/or beyond …
  • Examples
    • For now:
      • medical products & services
      • healthcare services or supporting healthcare
      • food processing/manufacturing or supporting food sector
      • transport & logistics
      • etc
    • For now & beyond:
      • e-commerce businesses delivering own or 3rd party products or services [online order & delivery model; medtech; remote care;
      • businesses involved in the data network ecosystem
      • businesses enhancing & securing WFH mode [tech and non-tech based]
      • businesses enhancing home convenience [tech and non-tech based]
      • etc
  • Defined as any business that, as a result of its network or resources, is able to facilitate the supply of critical medical/healthcare products for patients, medical staff & general public
  • Purchase Orders minimum R2,5M to R25M
  • Examples
    • certified masks [N95, KN95, FFP2, surgical masks]
    • personal protective equipment [PPE]
    • medical & hospital equipment
    • sanitizers, wipes, hand soaps
    • ventilators
    • test kits
    • jump suits
    • etc
  • find out more on our Purchase Order Finance page
  • The real challenges for any commercial funder attempting new funding in this “fog of war” are:
    • What type of financing products does one now offer?
    • How long [over what period] does one offer [short or medium or long term] ?
    • How does one price for the unfolding risks [eg. overseas supplier no longer want LCs or any collateral, if it’s even available is either drastically dropped in value or …] ?
  • So our transaction model/terms is adapting/changing from structured & fixed – to customized & contextual
  • Bridging Finance
    • 1-3 month term
    • Mainly for Purchase Orders of Essential or Critical supplies
    • But could be to fund pivoting to new products/services
  • Purchase Order Finance
    • Purchase Orders minimum R2,5M to R25M
    • financing specially to acquire product/supplies/equipment from local or international suppliers
    • requires a solid purchase order from a reliable end-client/end-buyer
    • our approach is to base the credit approval on the validity of your confirmed purchase order and not your financial standing or your collateral
  • Short Term Loan
    • 3-6 month term
  • Specialised Asset Finance
    • 12-36 months
  • Growth Capital
    • 12-60 months for the right type of expansion
  • Venture Debt
    • This is a mezzanine type approach providing debt financing [with an equity kicker given to Spartan]
    • Only applicable for certain category of businesses
  • Please note: we do not finance amounts under R500k
  • Previous Approach: structured, defined processes – think “engineering”. Appropriate, when there is certainty, clarity, confidence – rather than “fog of war”.
  • The New Adapted Approach: customized/contextual view on everything – think “artistic”. Appropriate when this no certainty, no clarity, no confidence – in this current “fog of war”.
  • Please note: we do not finance amounts under R500k
  1. Ensure you properly complete the web forms on this website – if not, it will jeopardize your application
    • There are 3 main web forms – you do not have to complete all
    • BUT, if you wish to move swiftly & constructively – then its best to complete the forms in the following order:
  1. Alternatively, you can still call us here (+27 11 568 6294/5) – BUT the info/docs from the above web forms will still be asked for
  2. Thereafter, once we have the info/docs – one of our Credit Analyst will engage with you via calls, email and via Zoom video chat
  3. Credit Committee operations:
    • We still have our usual Mon/Wed/Thurs 2pm-6pm sessions – BUT, also responsive outside those slots [depending on legitimate urgency]
    • Internal Credit Committee assessment/deliberations via Microsoft Teams video call
    • Credit Committee interviews entrepreneur team via Zoom video call
    • Our turnarounds times might be slightly slower due to the “fog of war”, but still faster than most other funders
    • Our transacting & contracting is still via e-signature on your devices, we have been using DocuSign for years
do I qualify?
what do I need to apply?
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