Is your business taking strain under our extended lockdown? Bills mounting up, COVID 19 UIF not paying out, creditors calling for their money and clients not paying? Does that sound familiar? Rest assured, there is help at hand. A new business funding mechanism is available to businesses that have been operating for longer than 12 months and have a good credit record. These are called Unsecured Business Loans.
Requirements for An Unsecured Business Loan
- All that you need to provide is 6 months bank statements for the initial assessment. No need for audited financial statements, debts and creditors profiles, assets registers and other complicated documents. You’ve got enough on your plate already, we try to make the loan application process one less thing to stress about.
- Private Lenders
These Business Funds are offer by private lenders. These companies are easy to deal with and
respond quick because they are keen to lend money to business. The reason for this is that they
make money when they lend money. While the money is in their bank accounts it is not making
them money, therefore they are eager to assist you with your business loan requirements.
- Loan Sizes
The minimum loan amount is R50 000 and the maximum R1,5 Million. The amount a company
is legible for is dependent on the company turnover and how regularly the income comes into
Due to the simple and streamlined process the loan approval can be within 3 days, but approval time is always subject to the applicant providing the information the lender needs timorously.
Repayment of business finance loans like these are made over a 6 month term. The repayment
is calculated by adding the loan plus interest together and then divided by 26 weeks. Repayment is by weekly debit order for a period of 26 weeks.
If a borrower has repaid the unsecured business loan on time for 13 weeks, then they are entitled to apply for a further business cash advance. The lender will reassess the business and make a decision on whether to advance further business funding.
Typical Applicant Profile
The lenders want to advance cash to businesses that have strong and regular cash flow. Businesses with daily or weekly cash in-flows are good candidates for a business loan approval. Typical strong, regular cash flow businesses are Filling Stations, Supermarkets, Butcheries and Hairdressers.
No Security Necessary!
A big advantage of unsecured business loans is that the borrower does not have to provide any security. Banks and other secured lenders want property, debtors and even plant and equipment as security for their loans. But in our harsh economic circumstances this model is not always possible which is where unsecured business loans come in to assist you to improve cash flow in your business right away.
Default on Loan
As with any type of lending, if the borrower defaults on the repayment, the lender is entitled to take legal action to recover their money. This can lead to the company and its members being listed at the credit bureaus and this has a negative effect on any business. It is best to not borrow money, if there is a likelihood of not being able to pay the loan back.
Unsecured business loans are suitable for businesses that have positive and regular cash flow. They are not the cheapest form of business loan but they are quick (1 days to approval), no security is needed and they suit businesses that are in need of a Short Term Bridging loan.