Ask any number of startups and newly founded Small and Medium Enterprises (SMEs) about their challenges and a good number of them are likely to mention funding as a problem. This is not even funding to scale or expanding their operations, but typically funding to carry out client projects or their services.

This type of funding challenge is typically acute with startups and SMEs given that not only are they likely underfunded as new businesses, but also because they likely have very little working capital to carry out projects or services once they secure the first few clients.

![Siya Ntulela](/content/images/2017/05/IMG_20170530_154051.png)
Siya Ntulela, CEO of Invoice Worx

A South African FinTech startup believes it has the solution to this challenge faced by many startups and SMEs. "Lack of working capital is one of the most contributing factors to business failures." said Siya Ntutela, CEO at Invoice Worx.

Invoice Worx is a working capital financing startup that aims to provide access to inventory and purchase order financing to small businesses, explained Ntutela.

Speaking to iAfrikan, Ntutela further elaborated what was the driving motivation behind the founding of Invoice Worx which was also recently selected as Seedstars World finalist for South Africa, "SMEs face great challenges in accessing trade finance with an unmet demand of $120 billion in Africa (one-third of the continent’s trade finance market) and US$700 billion in developing Asia. Bridging these gaps in provision of working capital would unlock the trading and employment potential of thousands of individuals and businesses around the world."

Apart from seeing the trade financing gap for the continent's startups and SMEs, the startup's founding team has two former bankers who, as Ntutela explained, saw a huge gap in the provision of credit to SMEs by traditional lenders.

![How Invoice Worx Works](/content/images/2017/05/how-it-works.png)

Invoice Worx main and current target market is small retailers in South Africa's townships, peri-urban and rural areas.

It works by negotiating credit lines and trade discounts with big manufactures by leveraging the buying power of the buying group (small retailers). On the back of this Invoice Worx then extends this credit to small retailers that wouldn’t have otherwise qualified in terms of the credit criteria from the big manufactures.

Once a retailer has been approved by Invoice Worx, they can then collect or take delivery of the stock frim the manufacturer. Retailers can then make repayments on the capital they were borrowed through vatrious methods including at payment points at larger retailers and wholesalers in South Africa such as Shoprite, Checkers, Pep and Boxer stores.

Their service is also available via USSD which the SMEs can use to check their outstanding balances or to order more stock. What is key also is that the Invouce Worx platform facilitates cashless transacting between the suppliers and retailers, in the process eliminating the cash in transit risk for the suppliers.

"Our core mandate is financial inclusion for SMEs that are excluded from the financial system. We are profit driven with a social impact motive." added Ntulela.

To advance their financial inclusion for SMEs mission, Invoice Worx will be starting micro-distribution centres around South Africa in the next 12 months. The plan is that the distribution centres will employ thoughts youth in the townships, addressing another one South Africa's challenges - youth unemployment.

OStarting a business and running can be one of the most challenging experiences a person experinces in their life time and the service offered by Invoice Worx can likely ease some of the pain. Sometimes, once you think your business is up and running and you have clients, you are faced with the challenge of clients that don't pay, Ntutela advices that it is important to build a business model that de-risks itself from none paying customers.

His words of advice for startups and SMEs are "Choose your customers carefully."

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