Business Start-up Loans in South Africa
Absa:
A lack of funding is a major stumbling block for small, medium or micro-sized enterprises. Absa bank offers an Enterprise Development Fund of R250 million which has been designed to tackle this challenge.
The bank finances an SMME’s working capital and expansion finance needs.
Nedbank:
The bank provides business finance for start-ups. What you get from this type of funding:
- Day-to-day transactional products
- World Class electronic banking solutions
- Short, medium and long-term investment options
- Property, equipment or vehicle finance
Nedbank also offers online business registration options to simplify the process.
What to expect when you are looking for business start-up loans in South Africa:
You may need to provide collateral for the loan. The value of the collateral must correspond to the level of risk which the lender assumes.
You should expect delays. The process could take up to 3 months, so be willing to wait a while. Whether you apply for a loan from a bank or from a micro lending institution, doing the necessary checks on the business and deciding on the viability of the business plan will take time.
You need to have a flawless credit record. No lender will be willing to provide funds to a business that cannot settle its debts timeously.
Unless your start-up already has revenue, it’s unlikely that anyone in South Africa will give you funding. Lenders and other institutions and individuals who are willing to provide funding will be less likely to give funding to a business that has not invested its own funds into the business.
You need to know exactly how much money you need.
You need to be specific about what you’ll be using the money for.
Keep in mind that many financial institutions are averse to risk, so you need to demonstrate a willingness to put your best foot forward to get business start-up loans in South Africa.
