Small business loans in South Africa

Find out everything you need to know about small business loans.

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What you need to know about business loans

To get hold of a loan for your small business could be a challenge, to jump through many hoops. But, hey, don’t be put off because you have a chance to get the funds your business needs.

Some apply because they need more stock, take on more staff for their growing business, have a better cash flow or improve their business equipment. 

Let’s dive into more detail with practical info about business loans in South Africa. We had a chat with Natalie, who owns a hair salon, to talk about her experience with business loans.

We asked Natalie, the owner of a hair salon, popular questions about getting business loans.

Have you applied for a business loan before?

“I contacted my business bank for a business loan but it was not possible to get one for my business.

"Then, I spoke to my father-in-law, who loaned me the money I needed to start my business. But unfortunately, I couldn’t meet my business bank’s requirements to apply for a bank loan. I also never thought of contacting other banks or lenders. I’m quite cautious and nervous when it comes to dealing with banks and other money lenders.”

Why did you need a business loan?

“I needed a business loan to buy the hair salon that I had previously managed for another owner. I didn’t have the money to buy the salon myself.”

Did you know about companies offer a variety of loans or cash advances to businesses?

“No, I didn’t think much about that because I first thought of my business bank, and then I went to my family next to see where I could get a loan.”

Do you have tips for small business owners that want to get business loans?

  • “Please do your research. Consider as many options as needed.

  • "Don’t rush it - read all of the fine print and be aware of how much money you will need to pay.

  • "Be mindful of the amount of interest you will have to pay back.

  • "Please get someone you trust and who is qualified to help you with the paperwork and get the best deal.

  • "Don’t fall for your feelings when making decisions.

  • "Keep calm and make sure that you do what is best for you and your business.“


Did you consider getting a business loan again?

“I was able to get an overdraft with my business bank account. My family also helped me when I needed money from time to time. I also got a credit card from my personal bank. But it is tempting to get a loan with those rainy days in mind.”

It was great to hear what Natalie had to say about business loans and how she ended up funding her small business.

Are you still curious about business loans? Read on to find out more.



Learn more about business loans

The South African government provides a few financial sources to get you going as an entrepreneur. These include grants and incentives.

Also, you can ask friends and family and knock on banks' doors.

But don’t despair if you can't succeed – there are many other funders out there willing to help you, but usually covering a short period. Such loans are friendly, which means the repayment terms are negotiable. As a business owner, you can apply online to see if you qualify. The only requirement for getting a loan is that your business must have been operational for a year.  

Find out more about business funding

Learn more about how to get funding for your business funding and tips to get funding for your business idea.

It could be easy to apply

There are many lenders, like banks, out there who can help you. With no hassles with paperwork, it’s easy to apply online on their websites for business loans. Once you get the okay, you’ll get your cash usually within a week. Please be careful to consider loans only from well-respected lenders.

How much do I need to pay back?

You can find out how much moolah you need to pay back each month by checking out the calculator available on the lender’s website. Of course, the fees depend on your business’s annual turnover or how much it makes in one year. Please check that there are no hidden costs. You can also ask for an immediate quote from some lenders.  

How do I pay back the business loan?

There are many lenders, like banks, out there who can help you. With no hassles with paperwork, it’s easy to apply online on their websites for business loans. Once you get the okay, you’ll get your cash usually within a week. Please be careful to consider loans only from well-respected lenders.


There are different types lending available

What kind of loan you want all depends on what your business requires. Some lenders only provide loans for equipment or stock. There are a variety of loans like a credit facility, bridging finance, and a cash advance.  


How to apply for a business loan

The way you could apply for a business loan usually starts on the bank’s or other financial institution’s website.

Then, follow the easy process and apply online or in person, which might be needed. Lenders would like to see how your business has been doing. So, they could ask you for three to six-month bank statements, a copy of your ID, proof of address, and your business registration number or Value Added Tax (VAT) number. The lender may also do a credit check on your business.

Lastly, there could be other possible requirements for you to apply for a loan. So, just make sure that you have everything covered before you apply for any business loan.


Will my business qualify for a business loan?

Banks and other financial institutions have their own requirements for their loans. Some requirements could be: your business must have been going for a year, with a turnover of about R40 000 a month or R500 000 per year. 



Yoco offers flexible cash advances to qualifying Yoco merchants

Yoco offers a flexible, fast alternative to business loans to qualifying Yoco merchants. Yoco Capital could help fund your small business. You could apply for a cash advance to boost your business. If you qualify, you can get an advance within a day. What a pleasure – no paperwork, no hassle, and no penalties!

Whatever you do, don’t give up on your dreams. Instead, keep working and find a way to make your business a success.

Disclaimer: Please get financial advice from a certified financial adviser before buying any financial product. Yoco does not offer loans. Yoco offers cash advances through its Yoco Capital product.

Source: Top Business Loans for Small Businesses in South Africa

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