Small Business Finance

Use this as your overall resource guide on the different types of business finance available.

Jump to:

Overview & Comparison
Types of SME Finance
Info on SME Finance
Questions
All figures indicated on this page are solely for informational purposes and should not be taken as any form of guarantee.

Small Business Finance Overview

Finance Type
Loan Amounts
Relative Cost
Speed
Repayment Terms
Credit Criteria
R10k up to R5M
Medium to High
Hours to Days
Fixed, Short Term
Business must show good turnover for 6 months+.
Merchant Cash
Advance
R5k up to R2M
High
Hours to Days
Proportional to Revenue, Short Term
Business must show good card transactions for 6 months+.
Secured Loan
R100k up to R20M
Low to Medium
Days to Weeks
Fixed, Medium to Long Term
Business or owner must have fixed assets for collateral.
R10k up to R5M
Medium
Hours to Days
Flexible, On Demand
Business must show good turnover for 6 months+.
R5k up to R5M
Medium
Days
Within 120 days, Repayment happens automatically
Business must have invoices with larger business and/or corporates.
R10k up to R100M
Medium to High
Days to Weeks
Short to Medium Term, Repayment upon complete
PO must be from a valid company/department. Proof of previous work normally required.
Trade Finance
R500k up to R50M
Low
Days to Weeks
Depending on need, Usually fixed repayment
Business must show historical ability to move goods once landed.
Equipment Finance
R20k up to R10M
Medium
Days to Weeks
Fixed, Medium to Long Term
Business must show repayment capacity.
Vehicle Finance
R50k up to R2M
Low to Medium
Days to Weeks
Fixed, Medium to Long Term
Business must show repayment capacity.
R50k up to R10M
Low to Medium
Days to Weeks
Flexible, Short to Medium Term
Business must have cash tied up in an asset that has some sort of liquidation event pending.
R5M up to R200M
Low
Weeks to Months
Deal-dependant, Medium to Long Term
Developer must show historical performance as a property developer.

Types of Business Finance

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Unsecured Loan

Read more details about an unsecured loan, and whether it is right for your business.
Read More

Invoice Discounting

Get the in's and out's of invoice factoring, and find out how to access the cash locked in your invoices.
Read More
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Purchase Order Funding

Need finance for your next purchase order? Read all the details and requirements.
Read More
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Property Backed (Secured) Loan

Looking for an inexpensive loan to grow and operate your business? Secured might be your best bet.
Read More

How SMB Lenders Quote Costs

Annual Percentage Rate

Do you Qualify

Most Affordable Small Business Loans

How the Application Process Works

How to Choose the Right Business Loan

FAQ's

How Small Business Lenders Quote Costs

An unsecured loan is simply a loan that does not require the business owner to provide any collateral or security to back the loan.

Interest Rate

Small business lenders have now stepped into the gap, and they provide Unsecured Loans to small business owners.

Fixed Fee

It is not uncommon to apply, and have funds in your bank account within 48 hours.

Factor Rate

Unsecured loans have opened the doors for smaller businesses to qualify for business funding where they previously would have to turn to a very costly personal loan.

Annual Percentage Rate (APR) - What's the deal?

An unsecured loan is characterised by two features:

  • A fixed repayment term
  • Fixed repayment amounts

Unsecured loans are generally short term. This means repayment is generally no longer than 2 years.

A typical repayment term can range from 3 months through to about 24 months. It depends on your preferences, and the lender.

Repayment Amounts

Repayment of an unsecured loan is very simple. You will generally pay a fixed amount over a set period (every week, second-week or month).
The repayment amount is generally made up of two components:

  • Capital repayment: The repayment of the amount loaned
  • Interest/fee repayment: The repayment of the cost/fee that the lender has charged for the loaned amount

Repayment Terms

The portion of each component which you pay depends on the lender.

As an example: Some lenders like to recoup a large portion of their Interest/fee's in the early stages of the loan.

Let's say you loaned R100 000 for 6 months, at an interest rate

How to Qualify for a Small Business Loan

There is no one answer to find what the qualification requirements are for a small business loan.

As a good rule of thumb, though, these are the general qualification requirements:

  1. A minimum trading history of 6 months: That means you have been earning revenue for 6 months or more.
  2. A minimum monthly turnover of R30 000: That means for the 6 months (or more) that you have been trading, you must have earned at least R30 000 on average in each month. That equates to an annual revenue of around R360 000.

Other than that, you need to have:

  • A registered business, and
  • A business bank account.

Different Types of Finance Qualification Requirements

Each different type of finance has different qualification requirements. You can reach about each of them, here:

If You Don't Qualify

Your best bet if you don't qualify for a business loan will be to look at crowdfunding options, or potentially a personal loan.

Remember, for a personal loan you will likely be required to sign personal surety, which is very risky.

The Most Affordable Types of Small Business Finance

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How the Small Business Finance Application Process Works

The application is a simple process. Here are the 5 steps of a small business finance application:

1

Step 1: Apply through FundingHub

One application form will mean we find you loan offers from over 40 different small business lenders.
It's fast, and free, and fully online.

2

Step 2: Add Information and Documents

FundingHub allows you to pause an application, and finish at a later stage. We guide you through the different document requirements, and which lenders need what information.

3

Step 3: View Loan Offers

We will present you with a list of all your loan offers. This takes seconds to fetch, and the list will be continually updated as you add more information to your profile. We do this all for you so you can compare your business finance options in one place.

4

Step 4: Choose an Offer

All the specifics around, pricing, fee's, speed of funds and the different lenders is laid out for you. If you have questions, we've got an independent analyst who can help you choose the right offer. All you have to do is choose your best loan offer.

5

Step 5: Finalise Application with Lender

Once you've found your best offer, your application will get finalized with the lender. All that will be left to do is agree on amount, terms and pricing.

How to Choose the Right Small Business Loan

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Questions?

How long does the application process take?

Typically, an application takes 5 minutes. If you have all your information at hand, it can go quicker.
Remember, the more information you provide the better we will be able to help.

How long does it take to be approved?

The approval process depends entirely on documentation.
In an application, you provide information about your business that then needs to be verified by the appropriate documentation.
If you have your documents ready (sometimes all that is required is 6 months bank statements), applications can be approved in as little as 24 hours.

Does my business qualify?

Different types of loans have different qualification criteria.
At minimum, to qualify for any loan your business should meet the following criteria:
  1. Monthly turnover (revenue) in excess of R35 000 per month.
  2. You have been earning revenue for at least 6 months.
  3. You have a registered business (Sole proprietors are accepted).

Do you fund startups?

At this time, unfortunately not. Please see minimum qualifying criteria above.

What type of lenders do you work with?

FundingHub only works with lenders that we would borrow money from ourselves.
Our suite of lenders is chosen to make sure that we cover the full range of funding types (so we can help majority of business-types), as well as the full range of business maturity (so we can help the majority of businesses, no matter how established or not).

How much does a loan typically cost?

The cost of a loan depends on a few elements, the most important of which are:
  • The risk factor of your business.
  • The type of loan.
To this end, interest rates on loans can range from 0.8% per month (7.6% annual interest rate) through to 30% per year.

How long are the loan periods?

Loan periods can range from a few days (revolving facility - pay as you use) through to years (secured longer-term loans).

It all depends on your needs.

What documents are required for a loan application?

Documentation depends on the type of loan you apply for.

In general, the smaller the loan amount, the less documentation required. You can get an Unsecured Loan using only 6 months bank statements, and director's ID documents.

However, a larger loan amount, or different type of loan might mean significantly more paperwork required.

When you apply, we will be there to assist you with what documents are required.

Will an application with FundingHub affect my credit score?

No. FundingHub does not pull credit scores when you apply, and therefore your credit score will not be affected.
In the event that this changes, we will always ask you directly if we can do a credit score on your business or any directors.
Note: FundingHub's lending partners may need to pull a credit score, but they will only do this with your explicit permission too.
Read all the FAQs

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