Quick financing from Capital Connect helps Engen Eastlakes grow from 1 to 13 sites

In retail, timing is everything. Engen Eastlakes in Cape Town turns to Capital Connect to ensure it has access to fast funding to grow its retail business and ensure that no opportunity slips through its fingers.

For a fuel station operator like Engen Eastlakes in Cape Town, managing their cash flow is critical. Millions of rand in working capital are tied up in fuel inventory at any time, which needs to be paid for upfront. To meet demand and keep fuel pumps flowing, it needs to keep two to three days of stock underground at any time. 

That means Engen Eastlakes needs to look to financing when a business opportunity arises. Most recently, it had a chance to purchase another fuel site. After a three-month wait for the approval of a bank loan, owner Songezo Nayo considered an alternative financing solution to supplement his capital to secure the deal. 

“The biggest thing in running a retail business is cash flow. Cash flow is king. If you have cash in the bank or if you have access to cash, you can solve most problems,” says Nayo. 

When the deadline for the purchase transaction arrived without an answer from the bank, Nayo turned to Capital Connect.  Applying for funding was as easy as clicking and borrowing by using an app—something familiar to Nayo because he uses Capital Connect for short-term financing to capitalise on fuel price hikes.

Fuel retailers, like Nayo, use fast financing from Capital Connect to stock up ahead of fuel price increases, using Capital Connect’s flexible offering to increase its profits. For example, with the fuel price increase in March 2024, retailers that made a R800k fuel purchase (truck-load), could earn approximate additional profits of up to R36 000 if they stocked-up at the current fuel rate, based on taking funding over a 90-day repayment period, and settling in the first 30 days.

There were no long forms to fill in, no requirements to provide audited financials, and no need for asset collateral. Capital Connect used credit scoring and data about Engen Eastlakes’ cash flow to make a fast lending decision. Within 24 hours, the loan was approved and the money was available to partially fund the purchase.

“Without Capital Connect, we would have lost that opportunity and if it was lost, it would have been gone forever,” says Nayo. “When you need quick capital and there’s an opportunity on the table, Capital Connect is there.”

Nayo seized an excellent, time-limited opportunity to scale his business, thanks to Capital Connect. This is just one example of how Capital Connect has supported the growth and sustainability of his business over the years, helping him grow the business from one to thirteen fuel retail sites and supporting it during cash flow crunches.

Today, Nayo uses a mixture of the business’s own working capital, short-term finance from Capital Connect and long-term bank loans to fuel growth. One key benefit of the Capital Connect offering is that it enables the retail business to repay the loan in small daily instalments, instead of large debit orders at the end of a month. This minimises the impact on cash flow. 

“As a retailer, it makes more sense to pay R3 000 a day on a loan of R1 million over 90 days, than trying to pay R90 000 at the end of the month. It lessens the load on your cash flow,” says Nayo.