Businesses may require funding for numerous reasons, including, startup capital, purchasing equipment, business expansion and working capital. Dream Team Capital can assist with developing the necessary documents and provide access to funders for business loans from across the country!
The most fundamental requirement for businesses looking for financing is having their business registered. Businesses can be registered online on the Companies and Intellectual Property Commission (CIPC) website. Entrepreneurs must maintain their records to assist lenders assess their bankability and affordability.
Depending on the funder approached, you will be requested to provide some, or all of, the following supporting documentation;
• Financial documents – Basic business plan; cash flow projections; outstanding debtors (i.e. customers who owe you money); up-to-date management accounts (i.e. income statement, balance sheet and cash flow statement); latest annual financial statements; latest VAT statement; last three/six months’ bank statements, tax clearance certificate”
• Personal documents – ID documents of owners; marriage certificates of owners (where applicable)
• Business documents – Company registration documents; office lease or mortgage agreement; shareholder agreements; share register; proof of business address; relevant business licenses; accreditations or registrations
• Application forms – Prepare your application pack to ensure your funding application is aligned with the type of funding opportunities the funders are looking for.
Some traditional lenders might even want to see a solid business plan detailing the purpose of the loan. And how you expect it to increase profits. Your business plan should include current and projected financials. Clearly demonstrate that your business will have enough cash flow to cover ongoing business expenses and new loan payments. This can give the lender more confidence in your business, increasing your chances of loan approval.
Most business loans require some sort of collateral. Collateral is an asset such as equipment, real estate, vehicles or stock which can be taken and sold by a lender if you fail to make payments on your loan and recover their money. In addition to collateral you may be asked to provide personal guarantee/suretyship from every shareholder and/or director of the company. A personal guarantee puts your personal assets on the line.
Providers of Business Loans Include:
• Department of Trade and Industry and Competition (DTIC);
• Industrial Development Corporation (IDC);
• KFW Development Bank;
• KZN Growth Fund;
• Land Bank;
• National Empowerment Fund (NEF);
• Small Enterprise Finance Agency (SEFA); and
• Technology Innovation Agency (TIA).
To attain a loan, Funders want to see that Applicants are;
• Committed business owners, financially and through their level of involvement in the business.
• Business owners that understand their business from a technical perspective and have good levels of business acumen.
• Business owners who run their business with integrity and transparency.
• Business owners who clearly depict a passion for the business and industry they operate in.
• A business owner who understands their customer and market segment well.
• A business that employs sustainability practices through adding real economic value, while having a positive impact on society and the environment.
• A profitable track record for established businesses.
Contact us for more information & assistance on Business Loans.