You have probably caught the entrepreneurial bug. Now you are thinking about how to secure the best business loan for your start-up to drive growth and business development. Funding is a very important aspect and getting funding can be both difficult and frustrating. But the aim is to get your business off the ground and a start-up business loan can assist in solving some of your business’s teething problems.
It does not matter what you want to use your start-up business loan for. The aim could be that you want to finance your mortgage payments, taxes, rentals, or employee payrolls. The loan can help you do just that.
Maybe you have no idea how you are going to pay for your permits, and business licenses, purchase office furniture, and equipment, or fund software installations as well as your initial supply of stock. There are several financial institutions ready to help you take out your business loan.
Start-up Business Loan Requirements
We, however, cannot ignore the fact that when you are a start-up, you absolutely have no track record, and you cannot provide evidence that you are profitable and can make repayments.
Financial institutions are more likely to fund someone that has experience in running a successful business, an investor who has invested a large amount of their money, and someone with a decent credit history. If you cannot provide evidence of this, you might find it difficult to land a business loan through a traditional bank.
But that does not mean you should not try to get your ducks in a row. You have the opportunity of increasing your chances of getting a start-up business loan by listing your financial requirements and compiling a comprehensive business plan that shows the bank how your business will succeed.
The next step is to demonstrate how you plan on repaying the loan by creating a budget that clearly shows that you will afford to make repayments. Lastly, if you have any security, leverage that. This could be your home, car, or other personal assets. But, if you are looking to borrow a small amount, you do not have to worry about security.
Top Business Loans
Let us talk about the best lenders in South Africa. These are the best small business funding resources that will help you find additional cash infusion for your company.
1. Small Enterprise Finance Agency (SEFA)
SEFA aims to assist small, medium, and micro-sized businesses and co-operatives in all industries by offering bridging loans, term loans, revolving loans, and structured finance to qualified businesses. The loanable amount ranges from R50 000 to R15 million with repayment terms of 12 months to 5 years.
2. First National Bank (FNB)
Because of its flexible repayment terms and the minimum loanable amount, FNB is dubbed as one of the best online small business loan lenders. One of their requirements is that you need to have an FNB Business Account which should have been active for at least 15 months, as well as an annual transaction of over R500 000. Their minimum unsecured loanable amount is R2 000 with a maximum of R400 000. If you need more, you must provide the bank with collateral and other documents.
3. ABSA
Absa provides short-term and medium-term business loans inclusive of vehicle, property, and debt finance solutions. It is regarded as one of the best small business loan lenders due to its options for skip payments and balloon payments which allow you to cope with loan repayments depending on your business performance for the year. Loan terms range from three months up to 10 years and collateral may be required depending on the amount you want to borrow.
4. Standard Bank
Standard Bank offers a variety of loans including fixed term and fixed repayments business loans, vehicle and asset financing, commercial property financing, and specialised financing. Through their Business Current Account, Standard Bank can provide you with instant capital accessible immediately. Repayments can be based on your business’s cash flow for easier loan management with repayment period terms that range from 12 months to 10 years. Standard Bank is willing to give you a minimum business loan amount of R50 000 to get your company off the ground.
5. Lulalend
If you are a small or medium-sized enterprise, Lulalend might be your go-to for that business loan. Their loan products include bridging finance, credit facility, equipment finance, inventory finance, and debt refinancing. To apply for a loan with Lulalend is as easy as filling out an online application and submitting the required documents.
They have the fastest approval process and can have the funds in your bank account within 24hrs. Their loanable amount starts from R20 000 to R1.5 million, depending on your financial performance and repayment terms range from 6 to 12 months.
6. Fundrr
To help small businesses, Fundrr provides quick access to additional funding. It uses automated models to quickly evaluate small business loan applications and once approved your loan amount can be paid within 24 hours. You can borrow R20 000 to R500 000 with a repayment duration that ranges from 3 to 12 months.
Other financial institutions can help you with your business loan. Before you can settle for one, make sure you have exhausted all your options and you are getting the best deal that suits your business needs. I wish you all the best. Remember, cash is king! Go get that business loan and build your empire.