Updated: Oct 4, 2019

Article by: Anglo Cape Confirming (Pty) Ltd.

Small to medium sized businesses need to borrow money to cover cash flow gaps, additional working capital, or finance growth and inventory. Small business loans are available from a large number of traditional (big banks) and alternative but well-established lenders such as Anglo Cape Confirming (Pty) Ltd.

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Small Business Loans South Africa

It’s important to have all the information required and have an application that stands out, in order to improve your chances of getting approved.

This article sets forth key steps and insights to giving a small business loan application its best chance of getting approved.

Firstly determine what type of business loan you require.

There are various types of small business finance that all have different objectives, for example :

Debtors financing

Short-term business loan (1-6 months)

Asset Finance (to purchase new equipment)

Trade Finance (To finance imports and inventory)

Small business loans are available from many different lenders with a vast amount of choices so its important you understand and know what type of small business funding you are looking for and how much your business requires. This will enable you to look for the correct lender and save time.


1. Determine how much capital you are requiring and have a clear objective of how you want to deploy this capital, this will also help you narrow down what type of loan would suit your cash flow requirements best.

2. Have up to date financial information on hand, including annual financial statements going back at least three years and current management accounts. Having this information on hand and up to date shows the lender you run an efficient business and shows that the owner is on top of the numbers.

3. Try to build and assess a relationship with the potential lenders and make sure you are able to work with this lender and have a mutual understanding of your business's cash flow requirements.

4. Have a good business plan and profile available. This offers a lot of insight into the business and the business growth potential.

5. Determine what security or collateral can be provided. A lender is primarily concerned about the ability of the borrower to repay the loan and if anything goes wrong how they can recover the outstanding debt.

This is a very important aspect of the application process as most lenders only do secured lending.

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Some common examples of what lenders could look at as collateral:

Personal guarantee

Cession of debtors

Notarial Bond over the stock

Mortgage bond over property (most popular amongst lenders)

6. Maintaining a good credit record, both personally and in your business. Most lenders will not consider an application where there is an adverse credit report.

7. Ability to repay, it is obviously very important for the lender to see that you are able to repay outstanding debt. Lenders will look to the financial statements to determine the ability of the company to repay outstanding debt using various ratios.

8. Look at alternative financing institution for short-term loans needs. Traditional banks are becoming harder and more cumbersome to deal with and often to do not understand SME’s financial requirements, making it even harder to get a small business loan approved.

By preparing yourself adequately for the application, and by taking the above-listed into consideration, you will be in a significantly better position to secure your short term business loan.

If you would like to find out more about how Anglo Cape Confirming can assist your business with it's cash flow cycle and management, please contact us on the details provided below.

We look forward to hearing from you.

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+27 21 419 5820

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