Business loans in South Africa can be acquired for for various purposes, including start-up costs, working capital, purchasing equipment, and business expansion. When comparing business loans, it is important to consider the needs of the business in order to select loan options that are best suited to its goals.
Requirements for a business loan in South Africa
• A comprehensive and detailed business plan;
• At least 6 months’ bank statements from your business’s bank accounts;
• A business current account in good standing;
• A cash-flow forecast;
• Sales and purchases budgets;
• Projected income and expenditure statements;
• Management reports;
• Personal statements of assets and liabilities for all partners, members or directors;
• Credit reports for the business and all partners;
• Amount and source of the owner’s contribution or stake in the business; and
• Documents indicating the intended use of loan funds.
Agencies that Offer Business loans in South Africa
A few funding agencies are listed below…for access to more funders for various sectors and industries contact Dream Team Capital. We can also assist with the required developments for a successful loan application.
The Small Enterprise Finance Agency (SEFA)
The Small Enterprise Finance Agency (SOC) Limited (sefa) provides financial products and services to qualifying SMMEs and cooperatives. SEFA provides services through a hybrid of wholesale and direct lending channels, in the following sectors:
•Services (including retail and wholesale trades and tourism);
•Manufacturing (including agro-processing);
•Agriculture (land reform beneficiaries and contract-farming activities);
•Construction (small construction contractors);
•Mining (small scale miners); and
•Green industries (renewable energy, waste and recycling management).
Sefa provides loans directly to small and medium-sized enterprises (SMEs), as well as cooperatives operating in all of the economic sectors. The facilities range from a minimum of R50 000 to a maximum of R15 million. Through its wholesale lending, the agency provides facilities (debt/equity) to intermediaries, joint venture, partnerships (Specialised Funds), and other collaborative relationships to extend their reach of making funding available to small businesses across South Africa. Loans to intermediaries are up to R150 million and loans through intermediaries to end-users are up to R5 million.
National Empowerment Fund (NEF)
The National Empowerment Fund (NEF) promotes, enables, implements and develops innovative investment and transformative solutions to advance sustainable black economic participation in the economy.
Their Fund Management, as a facilitator of the Codes of Good Practice of the Broad-Based Black Economic Empowerment Act (the Codes), supports the pillars of black enterprise by providing financial and non-financial solutions across a range of sectors to black-owned and managed businesses, for start-up, expansion and equity transformation purposes.
The Small Enterprise Development Agency (SEDA)
The Small Enterprise Development Agency (Seda) is an agency of the Department of Small Business Development (DSBD) which provides support to small enterprises and cooperatives in South Africa. SEDA business funding is a type of government small business funding to aid small business start-ups and help them grow. Loans are available for operational expenses, wages, and solvency.
Requirements for business loans are listed below;
•South African companies with an annual turnover of R50 million or less;
•Companies must have been in operation for at least 12 months;
•Business recovery projected within 18 to 24 months;
•No funding for bonuses or dividends;
•Minimum need of R1 million; and
•Economic distress must be Covid 19-related, not due to mismanagement.
The Land Bank
Land Bank is a specialist agricultural Development Finance Institution that provides financial services and products to the commercial farming sector, agricultural-businesses, and facilitates the inclusion of new entrants and historically disadvantaged persons in the agricultural economy. The Land Bank offers a wide range of loans for all financial needs like buying land, equipment and working capital for agricultural projects. As part of the application you will need a business plan.
They also work to facilitate collaboration and partnerships to ensure that the delivery of land, capacity, skills and financial resources take place for the benefit of the emerging farming sector.
At Dream Team Capital, we have extensive knowledge with business loans in South Africa. DTC provides services and advice on attaining these businesses loans and can we assist with the developments thereof!
Contact Us – for more information on business loans in South Africa.