Speed through to business loans and other lending options – get your business rolling with Swoop
Swoop is a credit broker and does not provide capital. We work with a range of companies to offer clear comparisons that allow customers to make choices on financial products & services. Swoop may receive a commission, which may vary by product but typically in the form of a fixed percentage of the loan amount. For certain lenders, we do have influence over the interest rate, and this can impact the amount you pay under the agreement.
No matter if you’re a sole trader, a startup, or an SME, it’s likely that at some point in your business’ life, you’ll need extra funds to power growth. Instead of seeking cash investors, fast and cost-effective business loans can be a better option. Acquisitions, debt reduction, solid working capital. Stop waiting on slow cashflow or investors to expand. Boost your company’s growth with a loan that’s purpose-built for business needs.
A business loan is a sum of money that’s borrowed by a business entity rather than a private individual.
Business loans come in many shapes and sizes and can be used for a wide variety of commercial activities – things like inventory purchase, property and vehicle purchase, tax payments, salaries, overhead costs, business startups, expansion, acquisitions, franchising, and repaying more expensive short-term debt. Repayment periods and interest rates will vary according to the sum borrowed, the type of loan, and the status of the borrower.
A word from Andrea
"It’s no secret that businesses need funds to grow, however cost-effective business loans can be a better option than traditional cash investors. Business loans are often non-dilutive sources of funding, which means your company gets the injection of cash it needs without you giving away control of your business."
There are many types of business loan. Some require the borrower to provide security (collateral) to reduce the lender’s risk, while some do not. Usually, the lump sum provided is lower and the interest rate is higher for loans where no security is provided.
Common South African business loans include:
A business loan calculator is a great starting point to understanding the cost of your loan. Use our free loan calculator below to work out your average monthly interest payments and the total monthly repayment amount, as well as the total interest paid and the total cost of the loan.
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This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
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Business loans can be for as low as R10,000, going all the way up to the Rmillions.
Repayment periods can be as little as a few months or over many years in the case of plant, machinery, and property purchases.
Interest rates and fees will vary according to the type of loan provided and the status of the borrower. Some business loans – for example, merchant cash advances – may be obtained in one or two days. Other types of loan – such as asset finance – can take much longer to secure.
Regardless of the type of borrowing, the basic process for taking out a business loan remains the same:
Repayment terms will vary according to the type of loan. Many short-term loans, such as invoice financing or merchant cash advances, are repaid from incoming business receipts, so they will repay quickly and automatically. Other types of loan, such as a commercial mortgage, may be spread over many years, with the borrower making regular monthly or quarterly repayments of capital plus interest.
Lenders will usually provide loans to businesses that show they can comfortably repay them, so risks for the borrower will be small. However, loans can be spread over years and business circumstances could change in the interim, some of which may present risk to the borrower.
Common risks include:
Before you apply for a business loan, make sure you have the necessary paperwork in order:
With so many types of business loan, selecting the right one for your organisation can be challenging. Register with Swoop today to find the best loan for your business needs.
The deals you can get from lenders depend on your credit score: the better your score, the cheaper it is to borrow.
Swoop has joined forces with various Credit Bureaus in South Africa to rate your business’ credit. The service is free and does not affect your credit score.
Possibly. Some lenders may check the credit score of the business and the business owners or directors. Too many searches on your credit report could affect your personal credit score.Â
In most cases yes, although you may incur some early-repayment penalties and fees by doing so.
It depends on the type of loan. Some loans, such as Merchant Cash Advances, can be agreed and paid into your bank account in one or two days. Other loans, such as Asset Financing, can take much longer.
Many business loans are used as Working Capital, to cover dips in cashflow and to pay salaries, overhead and buy inventory. Other common uses include tax payments, starting a new business, or purchasing vehicles, plant, and machinery.
Possibly. Even if you’ve been turned down elsewhere, it may still be possible to find a business loan to suit your current situation.
If you are in good standing with your current loan(s) and your cashflow shows you can afford the extra repayments, you may be able to top-up your business borrowing. In most cases, the application process for a top-up will remain the same as your original loan.
Business loans can be both secured or unsecured. Unsecured business loans will typically be for smaller amounts at a higher cost across shorter repayment terms.
If your business requires a larger loan value, offering an asset as security against the loan may allow you to secure additional funding at more competitive rates.
Your business loan term will vary dependent on the value of your loan, what type of loan you take out and how much you are able to repay each month.
There is no set minimum for the credit score you or your business needs to get a business loan, this will depend on the criteria set by your lender, your loan type and loan value.
If you have previously been denied a business loan, it is important to take time to reassess your current financial situation.
Improving your credit score, and paying off any existing business debts will help you reapply for a loan.
As the number of female entrepreneurs continues to grow in South Africa, alternative lenders and some government backed lenders have schemes and funding solutions available specifically for women led SMEs.Â
Loan finance for business (or, more broadly, lending or ‘debt finance’) is a catch-all for any type of borrowing that you pay back, with interest and/or a fee. If your business needs to raise money (capital) you can either borrow from a lender (i.e. debt financing) or sell a share of ownership in your business in return for capital (equity financing). You can of course combine the two.
The reason that people often use broader term ‘debt finance’ rather than ‘loan finance’ is because some types of borrowing (e.g. operating leases or supplier finance) are not actually loans and don’t appear on your balance sheet. Whatever stage you are at in your growth story Swoop can match you to the right lending options, whether you’re looking for startup loans, working capital loans or even a commercial mortgage. Your credit score isn’t impacted when you search for lending options with Swoop.
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