LSC is set up to assist SMEs in their short-term financing requirements, specifically relating to procurement. Initially the fund focused on invoice discounting and purchase order financing.
The Fund has an operational process that incorporates a direct link between the relevant paymasters and the supplier, to ensure the validity of the order and specifications of the goods to be supplied. The Fund manages quality control and ensures that all connected parties accordingly receive specified funds once the order is delivered.
Purchase Order Funding is critical to help black beneficiaries process orders, even if they do not have the cash-flow. Both the Corporate preferential procurement and the black-owned supplier benefit from such financing.
In the process of assisting the beneficiary with short-term financing, it is paramount that strict procedures, with respect to documentation and payment controls, are adhered to. This risk-management, together with the beneficiary relationship, is the reason that the fund can achieve a default rate of less than 2%.