Growing Paper is a South African company that produces handmade, biodegradable paper embedded with seeds. Founded to give consumers the option to make a responsible decision regarding the environment, social impact, local economy and sustainability, the company is dedicated to creating employment opportunities in the Swartland municipality. This region has seen a continuous rise in unemployment reaching nearly 15 percent – with a disproportionate impact on women and children.
Roxanne Schumann, Founder of Growing Paper, says that the company has strong ambitions to grow and become a household brand for South African customers. In these early stages, however, there was a capital shortfall:
“Growing Paper was at that stage that many businesses reach where we were not cash flow positive. We were growing but had hit that in-between phase where we didn’t have the income to cover the investment we needed for equipment, international marketing and a renovation project. There’s currently a lag with our present need to pay salaries, expand and keep up the infrastructure.”
It was essential to get some form of bridging finance to stay afloat, says Roxanne, because laying off employees was counter to the values and goals of the business.
“We’re temporarily victims of our own ambition! We’re not at maximum capacity but are moving in that direction. This year we’re expanding internationally and expect to see the rewards next year. We were in the gap between expecting to grow and fully reaping the benefits of that growth.”
Growing Paper needed a Revolving Capital Facility because as Roxanne points out, there was uncertainty over when money would be coming in and when expenses would have to go out:
“We were hopefully not going to use all of the Revolving Credit available to us but had to be prepared for a worst-case scenario at a time when we were restoring a greenhouse tunnel to make it more suitable for manufacturing our product and more comfortable for our employees. That’s a big project to fund but it makes us more efficient as a business in the long term.”
Roxanne initially approached a local financial institution looking at short-term loans. Unimpressed with the options available to her, she then reached out to Swoop to investigate better deals. Swoop was able to find a lower interest rate and larger facility: win-win!
“We agreed on a Revolving Credit Facility of R550,000. Not only was it more capital for a lower interest rate, but it also arrived in the business account within a week. In South Africa, that’s basically the speed of light!”
Roxanne says that the funding success is thanks to Swoop, where the Swoop team took the lead in finding and securing the necessary funds, walking her through the journey step-by-step:
“The efficiency of the turnaround time has been really helpful. We’re fixing dates with suppliers and we’re able to quickly get that greenhouse tunnel fixed. All the pieces are in place to see us meeting our goals in the next year and seeing Growing Paper become a success story in the circular economy!”