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Small Business Finance Scheme - PowerPoint

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					1. KHULA GUARANTEE SCHEME

      THE KHULA

        GUARANTEE

        SCHEME
   Purpose of Khula Credit Guarantee
   Scheme:


Finance made available to clients who do not
fully satisfy the Bank’s normal lending criteria

    Due to insufficient capital
    or insufficient security to offer in relation
     to the Credit Risk.
Who Qualifies as Candidates?
1.   S A Citizen
2.   Business conducted with a profit motive and viable
3.   Owner operator on a day-to-day basis
4.   Majority shareholder, no dual occupation
5.   Expertise / skills relative to the industry
6.   The required contribution
7.   Empowerment
8.   Start up: R10 000 to R350 000
9.   Existing business: R10 000 to R3 000 000
Exclusions
                   Non SA Citizens
                   Sole Proprietors
   Start-up ventures requires finance in excess of
                         R350,000
Existing business requires finance in excess of R3mil
       Old debt or existing debt in entities B/S
                     Split Banking
    Commercial property or any property finance
                  Agricultural projects
                       All trusts
              Duplications of indemnities
                    Money raising
                      Enrichment
                   High Risk Clients
              Default Grade more that 15
       Majority shareholder in another business
               No contribution available
WHAT THE FUNDS CAN BE USED
FOR?
 Establishing a new business
 R10 000-R350 000

 Expanding on existing
 business
 R10 000- R3 000 000

 Buying an existing business.
 R10 000 – R3 000 000
                                6
DOCUMENTS REQUIRED TO APPLY
 Comprehensive Business Plan
 Lease Agreements
   Financial Statements
   CV
   Identity Document
   Marital Certificate
   Assets and Liabilities
   Financial Statements (Expansion).
   Cash Flow Projections
   Bank Statements
   Buy/Sell or Purchase Agreement
   Fica
   Proof of own contribution
HOW MUCH CAN U APPLY FOR?

KHULA INDEMNITY COVER – WILL COVER LOAN
AMOUNT RANGE FROM:
R10,000 TO R3,000,000.

MINIMUM CONTRIBUTION OF 2,5% REQUIRED
DEPENDING ON THE AMOUNT

CONTRIBUTION CAN BE IN FORM OF HARD CORE
CASH OR IN A FORM OF ASSETS.
PRODUCT INFORMATION

Term loan – max. 60 months
Overdraft facility – 20% of capital amount
Guarantee – Rentals
Security
GNB- Equipment
Life Cover and Short Term Insurance
Cession of members loans
EXAMPLE OF DEAL STRUCTURE

 LOAN AMOUNT                   R1,000,000
 CONTRIBUTION 10%              R 100,000

 FINANCE AMOUNT                R 900,000

 KHULA GUARANTEE 80%           R 720,000

 INDEMNITY FEE 3% + VAT        R   24,624
  fee payable by the borrower

 BANK RISK                     R 180,000
MATRIX TABLE

 LOAN         GUARANT    INTEREST   MIN        INDEMNITY
 AMOUNT       EE COVER   RATE       CONTRIBU   FEE
                                    TION       CHARGE
 R10,000 –    90%        PRIME+2    2,5%       2%
 R250,000
 R250,001 –   80%        PRIME+2    5%         3%
 R1,000,000
 R1,000,001   70%        PRIME+3    10%        3,5%
 R3,000,000
    Fathima Osman
  Khula Specialist
  ABSA NEW ENTERPRISE BANKING
     ABSA TOWERS 2ND FLOOR
031-3669111/9419(office)
END


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