In our guide today, we will show you how the Absa Thembani international guarantee fund works in South Africa.
This fund exists to help black-owned small businesses in southern Africa, southern Africa, and countries where Absa does business.
The fund will provide a letter of guarantee to Absa when you want to lend money from any financial institution.
We will first show you the qualifying criteria for this fund.
What Are The Qualifying Criteria
Below are the requirements for eligibility of the Absa Thembani funds:
- You should be a South African citizen
- Ownership of the business should be at least 515 black
- Must provide an enterprise proposal that proves to be viable and create sustainable jobs
- The total guarantee you need should not exceed 75% of the credit facility or exceed R10 million
- Absa bank account
- An expert or have the skills relevant to the business
- Provide historical financials or a realistic cash flow forecast to demonstrate the business’s profitability.
- You should have an Absa transactional account.
This is the qualifying criteria for Absa Thembani international guarantee fund south Africa.
We will show you exactly how this fund works.
Absa Thembani International Guarantee Fund
When applying for finance from one of the major banks, you can approach Absa to fund the collateral guarantee for the loan.
Rural businesses women’s and youth-owned businesses are preferred for this funding.
The fund provides a collateral amount of R50 000 to R10 million.
The loan term should not exceed five years.
The fund covers AVAF/CAF and yellow goods.
These assets must be used for the business operation to produce goods or provide services.
This is how Absa Thembani international guarantee fund works in South Africa.
Now that you know how the fund works, we will show you the fees and interests associated with the fund.
What Are The Fees And Interest
Corporate and government contracts can be financed at different fee structures at an interest of 3.3% of the collateral amount.
You need to pay an initiation fee of 0.05% of the collateral value before the disbursement of the fund.
You are charged 1.5% of the loan amount per annum as a guarantee invoice upfront before disbursement of funds.
The 1.5% fee is payable upfront where cash flow is not accommodating, or it can be paid in four installments at the beginning of each quarter.
After the first year, you are charged 2.5% for every year until you complete paying the loan.
This is all the information about Absa Thembani international guarantee fund in South Africa.