Sefa term loan – Small and medium enterprises (SME) have been identified as productive drivers of inclusive economic growth and development in many economies. In South Africa, research shows that small and medium-sized enterprises make up 91% of formalised businesses, provide employment to about 60% of the labour force and total economic output accounts for about 34% of GDP.
The critical role played by SMEs calls for support especially financially. One institution playing a role in this regard is the Small Enterprise Finance Agency (SEFA). SEFA is an agency mandated to foster the establishment, survival and growth of SMMEs. One of the ways in which this is being achieved is through the provision of term loans.
A term loan is offered with specific amounts of money with a repayment schedule which runs between 1 to 5 years and a floating or fixed interest rate.This loan has been designed to finance assets that have a medium to long-term lifespan such as machinery, fixtures and fittings, vehicles, office equipment, etc.Term loans can be used for start-ups, expansions and acquisitions of businesses.
Some of the requirements for this loan include the fact that applicants must be South African citizens with valid South African identity documents,be legally constituted including sole traders with a fixed physical address,applicant must have the necessary contractual capacity,the controlling interest of the enterprise for an applicant which is a juristic person (51% of the issued ordinary share capital) must be held by South African citizens, all business operations, including but not limited to projects, programs or enterprises, must be operated within South Africa, the enterprise must be compliant with generally accepted corporate governance practices appropriate to the client’s legal status, have a written proposal or business plan that meets the requirements of SEFA’s loan application criteria, provide personal and credit references, be owner managed,etc.
This is truly empowering finance. SEFA can be contacted on 0860007332.