SMME Banking - Financing your SMME Business
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 Financing your SMME Business
 
Whether your small business needs capital for working capital to establish new or expand its existing business, or the finance to acquire vehicles, plant and machinery or property, Nedbank Lesotho’s SMME Services has the right solution. Nedbank SMME’s sole purpose is to focus on small businesses with aim of growing them into sustainable businesses.


Overdrafts for SMMEs (see also Business Overdrafts)

Overview
 An overdraft is a short term borrowing of not more than 12 months, this is beneficial for your business when you need easy access to cash, and is usually granted as working capital. It is controlled by how you, the account holder withdraw and deposit.


Features and Benefits
  • Beneficial for your business when you need easy access to cash
  • Can be used as working capital

Qualifying Criteria
  • Application Letter
  • Passport
  • Security in the form of one of the following:
    - Life Cover Policy with a surrender value
    - Investment
    - Property with a lease
    - Surety
    - Contracts (if financing against confirmed orders/ contracts) – this may have to be ceded to the bank
  • Registration Documents
  • Financial Statements
  • Business Plan with Cashflow projections (for new businesses)


Business Loans for SMMEs (see Business loan general)

Overview
This is a long term loan, for not more than a 36-month period. A business loan is useful for start-up business or if you need to buy equipment or any other assets for the business.


Features and Benefits
  • Provides needs for cash for your business. Funds are transferred directly to your operating account for easy access after the loan has been approved.
  • Capital repayment is done monthly (simply transferring funds from your operating account, or you also deposit cash towards the loan
  • Payment of interest is also monthly

Qualifying Criteria
  • Application Letter
  • Passport
  • Registration Documents
  • Financial Statements
  • Business Plan with Cashflow projections for new businesses
  • Security in the form of one of the following:
    - Life cover policy with a surrender value
    - Investment
    - Property with a lease
    - Surety
    - Contract proceeds to be ceded.


Building /Property Loan for SMMEs (see Business building/property loan)

Overview
A building loan is beneficial for SMMEs that need to build property, in order to grow their existing profile, or get into a new market. Repayment period for the property loan is 10 years.


Features and Benefits
  • Beneficial for building a commercial property or residential property
  • Commercial property is repayable over 10 years
  • Residential property loan is repayable over 20 years
  • The client services interest payments during the construction of the property
  • The interest on this loan is generally lower than that of a business loan, and overdraft
  • Payments by the bank are made only after the inspection by Bank approved quantity surveyors and payment certificates issued.


Qualifying Criteria
  • Application Letter
  • Proof of Lease
  • Approved Building Plan
  • Building Permit
  • Approval by W.A.S.A- undertaking to provide water to the property
  • Approval by L.E.C – undertaking to provide electricity to the property
  • Proof of Income (financial statements)
  • Valid Passport
  • Own contribution being from 10%
  • Three quotations from Bank approved contractors
  • Marital Status Declaration.

Loan Terms and Conditions
  • The bank will register a Bond through its attorneys
  • The applicant must take a house owners’ insurance cover
  • Life Cover equivalent to the Loan amount
  • Payments to contractor shall be against certificates signed by the quantity surveyor, the applicant and the contractor
  • The client should undertake to provide the bank with original written waiver of the contractor’s lien in favour of the bank.


Asset Based Finance for SMMEs (see general business ABF financing)

Overview
A convenient way to acquire asset based finance either new or pre – owned. This can be in the form of vehicles, trucks, taxis, commercial vehicles or other assets such as machinery, water pumps, milling equipment, etc. The client needs to have a Nedbank account in order to be considered for a vehicle loan, or willing to open a business account.

Taxis

The bank will finance existing clients who are currently operating in the public transport business and who own more than one vehicle with satisfactory conducted banking accounts and acceptable financial position. It is important to have a good credit history/account conduct, as this is used to determine serviceability of loan. The loan is payable in 36 – 48 months.

Qualifying Criteria
  • Application Letter
  • Passport
  • Quotation of asset
  • Quotation of Insurance (for vehicles, taxis, etc.)
  • Deposit of minimum 30%
  • Life Cover equal to the amount of the loan must be ceded to the bank
  • Latest Financial Statements

NB: It is the client’s responsibility to see to it that Insurance and relevant permits are renewed annually and proof thereof is submitted to the Bank.

Trucks

Nedbank Lesotho will help you finance trucks, yellow goods, and other equipment for your growing business needs.

Qualifying Criteria
(A) Loan application letter should contain the following:
  • Type of facility required
  • State the age of the Vehicle ( brand new or second hand)
  • Value of the Vehicle
  • Repayment period (max 60 months, max 36 months if commercial)
  • Deposit offered (minimum 10%)
  • State the purpose that the vehicle will be used for

(B) The following are required as supporting documents to the Application:
  • Certified Copy of client’s Drivers license
  • Certified Copy of Client’s passport
  • Copy of Client’s Personal Balance Sheet (form to be furnished by the bank)
  • Source of repayment (cash flows or Pay slip)
  • Copy of Invoice from the Dealer stating engine numbers, chassis numbers, Year model and Price inclusive of VAT
  • Copy of Comprehensive Insurance Quotation
  • Marital Status Declaration (form to be furnished by the bank)
  • AA report (for second vehicles only)

Other Business Vehicles
Nedbank Lesotho will help you finance new vehicle and pre-owned vehicles for your growing business needs.

Conditions for pre-owned vehicles finance:
  • Mileage not more than 60,000
  • Not more than 3 years old
  • AA report should be submitted

Qualifying Criteria
  • Quotation of Vehicle
  • Quotation of Insurance
  • Deposit of not less than 20%
  • Application Letter
  • Passport
  • Latest Financial Statements
  • Registration Documents

Terms and Conditions for Vehicle Finance (including trucks, taxis, and other vehicles)


Full and final payment for vehicles financed by the bank will be made when the following are met:
  • Original Invoices from the dealer stating engine numbers, chassis numbers, Year model and Price inclusive of VAT is submitted to the bank
  • The Vehicle to be registered in Lesotho in the name of the client
  • The vehicle registered on behalf of the client by Transport Logistics Consultants (Pty) Ltd
  • Vehicle to be comprehensively insured for a full year in advance with Nedbank Lesotho interest noted
  • Client has signed the Installment Sale Agreement with the bank
  • A complete set of registration papers for the vehicle are submitted to the bank
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Foreign Exchange Rates: February 7, 2012 Loti/$  7.44 Loti/£  11.76 Loti/€  9.75
 Nedbank Lesotho Limited Reg. No 92/191. Nedbank Lesotho is a member of the Old Mutual Group.