Many small businesses do not have assets to put up as collateral for a bank loan. To assist these businesses, the government’s small business finance agency, Khula, offers them a credit guarantee scheme.
The scheme is an indemnity to us should the business fail to pay the loan. 50% to 90% of the bank loan can be indemnified under the Khula scheme. The maximum amount that can be approved under the scheme is R3 million.
To qualify for a Khula-supported loan you will need to contribute to your business and this may be as much as 10% of the amount you want to borrow. This contribution can be either cash or equipment that will be used in your intended business.
If you need finance now, you can apply by visiting your nearest branch and speaking to a Business Banker. The following information is required:
Information and documents
Details such as the nature of business, product offering, market environment and management skills
Personal statement of assets and liabilities for all partners, members and directors
Cash flow forecast
Projected income and expenditure
Amount and source of the business owner’s contribution or stake in the business
How will the business use the finance? For example, capital expenditure or working capital
Sales and purchases budgets
Documents required if buying an existing business
Copy of deed of sale or draft deed
Draft or signed lease agreement for premises
Details of proposed or offered collateral
Credit bureau checks of business and partners
Additional requirements if you have an existing business that has been banking at another institution
Financial statements of the business
Three months’ bank statements
Facilities letter from existing bank
Details of collateral held by existing bankers
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