Khula Enterprise Finance loans are designed to facilitate access to credit for small, medium, and micro enterprises (SMMEs) in South Africa by partnering with commercial banks, retail financial intermediaries, and microcredit outlets[3][7]. Applicants must typically approach an approved financial intermediary, such as a participating commercial bank, to request a Khula-backed loan[2].
Key loan requirements typically include:
- Business registration: The applicant must be a legally registered entity in South Africa, with appropriate documentation from the Companies and Intellectual Property Commission (CIPC) and registration with Unemployment Insurance Fund (UIF)[1].
- Ownership: The business must be 100% owned by South African citizens[1].
- Employment criteria: At least 70% of the business’s employees must be South Africans[1].
- Operational history: The business should have been operating for at least 12 months[1].
- Tax compliance: The business must be registered and in good standing with SARS (South African Revenue Service)[1].
- B-BBEE requirements: For some loan offerings, the project or applicant must be at least a level four broad-based black economic empowerment (B-BBEE) contributor[1].
- Active involvement: Passive or speculative investors are excluded; applicants must be directly involved in the industry for which funding is sought[1].
Eligible uses of the loan may include:
- Acquisition of new equipment, machinery, vehicles, and business assets for operational purposes[1].
- Working capital for suppliers, employees, stock, raw materials, and other operational costs[1].
- Business expansion, asset purchasing, or acquisitions (subject to a cap, e.g., up to 49% acquisition at initial investment)[1].
The maximum loan amount is typically up to R15 million per entity, with a repayment term of up to 120 months and potential moratoriums depending on business cash flow[1].
You may initiate the application process at a participating bank or intermediary, such as ABSA, by specifically requesting a Khula-backed loan[2]. For additional guidance and specific approval processes, consult the list of approved intermediaries on the Khula or SEFA (Small Enterprise Finance Agency) websites[3].
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