In our guide today, we will briefly discuss the Absa SME fund in South Africa.
Starting and running a business takes a lot of courage and determination, together with good financing.
The SME sector requires optimal funding support to boost its productivity.
Absa offers startups and existing, medium, and micro enterprises asset loans, working capital, and business expansion finance.
First, we will show you the requirements to qualify for the Absa SME fund.
What Are The Qualifying Criteria
Below are the requirements to qualify for the fund:
- You should have credit approval
- A valid contract or purchase order
- You need to have valid quotations
- Business should fall under the SME category defined by the Department of Trade and Industry.
- A South African resident or permanent resident of SA
- Fully involved in the day-to-day operations of the business
- An expert on your business
- You should have a well-researched business plan or business profile
- Realistic cash flow and historical finances showing business profitability
- An account with Absa
That is the qualifying criteria for the Absa SME fund in South Africa.
Now that you know the qualifying criteria, we will show you exactly how this fund works.
Absa SME Fund
Absa spends a lot of time with SMEs to understand their needs in developing various collaborative relationships for them to provide financial products tailored to the core needs of the SMEs.
The bank offers self-liquidating products, with the ultimate source of their repayments based on the receivables.
This reduces the requirement for collateral which is a major requirement for international funding.
The bank collaborates with the government and corporates under their value chain funding and enterprise supply development programs to help manage the SMEs’ performance risk.
This is done through products such as Letter of Credit and by mitigating their credit risk profile with bigger corporations.
This is how the Absa SME fund works in South Africa.
We will now show you the types of SME funds available for you.
What Are The Types Of Absa SME Funds In South Africa
There are three funding solutions for SMEs offered by Absa.
- Agricultural BEE Finance
- Women Empowerment Finance
- Absa Empowerment Finance
With the agricultural BEE finance, you can apply for a facility of up to R15 million.
The women empowerment fund aims at women-owned businesses and loans between R50 000 and R15 million.
With Absa empowerment finance, you can apply for an overdraft, term loan, or commercial asset finance of up to R15 million.
This is all the information about the Absa SME fund in South Africa.