Got a great business idea? Get a great loan.

    August 28, 2017

    What business loans are available in South Africa for people wanting to trade?

    Banks cater for any business big and small, male or female.

    Not only banks offer loans, so does the Government –

    • Banks are a popular choice for business finance
    • Only short and medium term loans are granted
    • Government-funded loans are more flexible and cheaper
    • Other finance options are also to be found
    • Online loans save you time and money

    What business Loans are Available in South Africa?

    Banks make loans based on certain rules.  Whether it’s cash for growth, to purchase assets or to finance costs. Short and medium term loans are on offer.

    However, you need to be a South African citizen.

    Are bank Loans on Offer?

     

    First National Bank sets the following rules –

    • Loan periods of three months to five years
    • Minimum loan amounts of R2 000
    • An active FNB account for at least 15 months
    • Annual turnover of at least R500 000

     

    Absa Bank offers four options –

    • Development Credit Fund for existing small, medium and micro enterprises (SMEs). Loan amounts are between R50 000 and R5 million.
    • Women Empowerment Fund for business women with skills and expertise.
    • SME Fund for previously disadvantaged individuals with 100% black-owned companies
    • Thembani International Guarantee Fund for BBBEE companies with a minimum of 51% black ownership. Loans granted are between R50 000 and R10 million. Businesses must operate within South Africa and/or in countries where Absa operates.

     

    Qualifying criteria

    • Loans are only available to South African citizens
    • Major shareholders must run the firm (66%)
    • A proven record of business-related skills and, or expertise
    • A solid business plan
    • A record of profits
    • Realistic cash-flow forecasts
    • A proven record of revenue stream
    • The business is run in an approved industry
    • Whether repeat loans are required
    • Main bank account must be held with Absa

    What business loans are available in South AfricaWhat business loans are available in South Africa – Government-funded Loans

    There are many small firms facing the challenge of raising money for start-up or growth. A Government funded loan, therefore, is the most cost-effective solution.

    However, patience is the name-of-the-game when applying.

    • First, there is a mountain of paperwork
    • Second, the loan is subject to very strict selection rules
    • Third, be prepared for a very long wait

    What is a Government business Loan?

    The price of all the red-tape and long waiting periods is well worth it because, compared to banks, government-funded loans offer:

    • Much cheaper interest rates
    • Flexible repayment terms
    • Longer loan periods

     

    The government mostly finances loans through associated organisations such as the Small Enterprise Development Agency (SEDA) and the Department of Trade and Industry (DTI).

    Government funding for business programmes include:

    • Automotive Investment Scheme
    • Black Business Supplier Development
    • Clothing and Textile Competitiveness Improvement
    • Critical Infrastructure
    • Film Incentive
    • Business Process Services
    • Capital Projects Feasibility
    • Support for Industrial Innovation
    • National Youth Development Agency
    • National Empowerment Fund

    What business loans are available in South Africa – Other sources For business Loans

    There are several South African finance companies specially geared to assist business owners. Among these are:

    Genfin

    A South African business that has been operating for more than a year and with an annual turnover of at least R1 million qualify for a loan from this company. You need to have proven cash-flow records and potential for growth.

    Qualifying criteria

    To qualify for a loan business owners must provide:

    • Bank statements
    • Management records
    • All relevant company records

     

    How long does it take and what do you get?

    • Approval within 2-5 working days
    • Loans of between R100 000 and R5 million available
    • Refinance the loan when 50% of the original amount is paid off
    • No hidden costs

    Obtaining a Business loan Online

    If you do not have the time to front your own loan applications, going the online route could be the answer. There are a number of firms that do all the hard work on your behalf.

    Search the web for business loan service providers, fill in the online form, then see who comes back with the best solution based on your needs.

    Conclusion

    The South African financial market caters for all business owners. Black or white, big or small, male or female –  there is a loan for you to start and grow your dream.

    All you need to obtain cash is to meet the requirements of the various finance firms on the market today.

    To apply for a loan just fill in the form. Don’t forget to click to submit the form!

    All info was correct at time of publishing