Smiling lady working on laptop business financing options South Africa.

Starting and growing a business in South Africa is no easy task. With a difficult economy and lack of easy business funding options, many businesses struggle to get off the ground. While this may seem all doom and gloom, it does leave a country full of opportunity for those who are ready to tackle the challenge. There are thankfully options for most businesses including investors and applying for a private business loan.

Once you have started your business and have been operating for a year or more, many businesses look at expanding. This expansion often requires business financing, which is not as easy to come by. However, there are a few great options if you know where to look. This specialised business funding can help your business grow even faster.

Get an Investor

Getting an investor is usually the avenue most businesses consider, whether SME funding, Agri SA Funding or SMME funding. Bringing on an investor can help you to bring on funds and potentially even connections, depending on the investor and the agreement. The investor also will not need to be paid back as with other types of business finance. While this may seem too good to be true, let’s look at the downsides.

An investor will require a stake or shares in your business. Many investors will not consider investments with less than a 30% stake meaning you will need to be prepared to give up a chunk of the equity in your business. While funding agencies may try and work with you to reduce this, it is often not possible to get lower than 20%. Investors will also then be involved and have a say in how and what you do as a business. While this may work for some companies, others may prefer to keep full control.

Further than this, Investors in South Africa often require a company to have specific compliance requirements with regards to BBEEE. However, this will depend on your industry and the size of your company. Lastly, finding investors can be difficult as investors are looking for great returns. Returns that beat the stock market. So very few companies will meet these requirements and will therefore not get funded.

Business Loans

Unlike an investor, business loan funding will not require you to give away equity and the lender has little to no say in how you run your business. The downside is you will need to pay the loan back over a specific period of time with interest. Your interest rate will be linked to your businesses credit history and risk factors. Business loans in South Africa through banks can be difficult to come by as they require large collateral and credit histories.

We help established businesses apply for business loans in South Africa to suit your business needs. Whether you are in manufacturing, farming or commerce, our team can assist you in finding the right business loan for your needs. Get a business loan through Business Loans.

Running a business in South Africa is challenging, but for those who make it, the reward is great. While business funding may seem like a challenge, it can be made easier by using the right service. Whether you are looking to bring on an investor or are wanting to take out a small business loan, do it through the right people. Don’t let financing hold your business back in 2021.

We offer established businesses in a growth phase up to R6 million in funding within 24 hours to help you put your growth plans into action. Apply for business funding in South Africa now.

Get an unsecured business loan in less than 24 hours.

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