How to get a business loan in South Africa

Starting or growing a business often requires more than a good idea – you’ll need funding to get your enterprise off the ground.

In South Africa, banks and other lenders offer different types of business loans to help entrepreneurs cover start-up costs, manage cash flow, or expand operations.

Before you apply, it’s important to understand what lenders look for and what documents you’ll need. If you’re still in the planning stages, you should also learn how to put together a solid business plan that increases your chances of finance approval.

Read on to find out how to get a business loan in South Africa, and how such a loan can assist you.

Tip: Register on JustMoney today to apply for a personal loan – it’s a quick, convenient way to access cash while you work on securing business finance.

Why business loans are important for SMEs

Business loans play a crucial role in the small and medium enterprise (SME) ecosystem, mainly because of the huge financing gap that exists.

Business loans are essential as they provide capital for start-ups and assist with cash-flow management and expansion. SMEs often rely on internal funds or cash from family and friends to launch and run enterprises, which can limit their growth potential.

Even though SMEs are often called the backbone of our economy, the lack of affordable and accessible finance hampers their ability to scale and make a meaningful difference.

In short, business loans are crucial for the overall economic development of South Africa.

Saving up for small business expenses? Find out which savings accounts offer the best interest rates.

The current state of SME business funding in South Africa 

The Covid-19 pandemic delivered a blow to South Africa’s SMEs, but the sector has shown resilience in the aftermath of the pandemic. A 2025 Xero report shows that 83% of small businesses grew their revenue over the past year, and 90% are optimistic about future growth.

Nevertheless, Finfind’s South African MSME Access to Finance Report 2025 indicates that SMEs continue to face barriers to accessing finance. Many micro and small businesses fall outside the formal financial system as they don’t fit traditional funding models.

You need a good credit score if you’re applying for a loan in your personal capacity. Check yours today.

Steps to apply for a business loan

The following steps will help you apply.

1. Determine your business needs

Small businesses often struggle to know where to start when it comes to accessing funding – and even those that are already established may not be aware of their next steps.

“SMEs often lack an understanding of what type of finance they need and what financing tools are available to them,” explains Maryna Steyn, editor at SME South Africa.

The key here is to determine what your business needs are, since they will define the type of loan for which you apply.

A spokesperson at Absa says there are different types of business loans available, depending on the type of business entity applying. Banks look at these loans differently. 

2. Prepare a strong business plan

A business plan is a roadmap that shows how a venture will achieve its goals and prove its viability to investors or financiers.

A good business plan talks to what the business is all about, who the customers are, and how they will be serviced by the business, Absa explains.

When applying for a business loan, banks will want detailed information about your business, its finances, and its future. This makes it important to track your finances carefully and develop a solid plan and strategy.

“Make sure you have all the proper documentation and have clearly outlined your vision for the business,” says Alan Shannon, executive of small business and private clients (sales strategy and enablement) at Nedbank. 

“A sound business plan gives the bank insight into the plans of the business as well as future projections that demonstrate the viability of the enterprise,” adds Shannon. He recommends aspiring entrepreneurs attend small business seminars to better understand banks’ requirements.

According to the SME Toolkit South Africa guide, each business plan should be tailored to your specific needs. The basics include a cover page, an executive summary, and key details about the business.

• Strategy – Define the business idea, customer need, market environment, ecosystem, and competitors. Provide a brief industry and market analysis, as well as a SWOT analysis (strengths, weaknesses, opportunities, and threats) and how risks would be addressed. 
• Target market – Identify customer segments, their needs, and routes to market/distribution strategies.
• Offering – Explain the product/service, market shifts it addresses, innovations, and digital support. 
• Management and people plan – Outline the management structure and the required skills, experience, and the team’s capabilities to execute the strategy.
• Operational plan – Detail production, location, logistics, legal/regulatory requirements, and delivery model.
• Financial statements and projections – Set goals, funding needs, budgets, projections, financing requirements, and business structure.
• Sales and marketing plan – Establish the core value proposition, added benefits, messaging, channels, and go-to-market budget.
• Appendices and supporting documents – Include any additional information that may be relevant.

3. Get your documents ready

A well-documented application can improve your chances of approval and help you secure the funding your business needs.

Below is a list of documents you’re likely to be asked for when applying for a business loan in South Africa.

The exact requirements vary by bank, loan type, loan size, and risk assessment.

The two tables below indicate what’s required from a start-up and from a small business in a growth phase.

Documents required from start-ups

Documents required from businesses in a growth phase 

Steyn recommends that you ensure your small business is financially and legally compliant before applying for funding. 

“Be proactive, not reactive,” she says. “Review the requirements thoroughly and ensure you understand the terms before submitting your application.”

4. Review your credit score

If you’re a sole proprietor, you’ll likely review your personal credit score before borrowing.

Lenders largely rely on a business owner’s personal credit score when lending, as this will indicate your creditworthiness for an early-stage business venture. However, it’s helpful to understand what a business credit score is and how it works.

5. Choose a suitable lender

Choosing the best lender for a business loan involves evaluating several key factors to ensure the loan aligns with your business needs, financial health, and growth goals.

In South Africa, business owners can access funding from several types of lenders, each with its own advantages and considerations:

1. Commercial banks

Major banks offer traditional business loans, overdrafts, and asset finance.

• Best for: Established businesses with a solid financial track record and formal registration.
• Keep in mind: Approval can take time, and banks usually require collateral or a good credit history.

2. Government agencies and development finance institutions

These entities provide funding for SMEs, start-ups and historically disadvantaged entrepreneurs.

• Best for: Businesses that meet specific development or empowerment criteria, or operate in priority sectors like manufacturing, agriculture, or green energy.
• Keep in mind: Application processes can be detailed, and approval may take longer than private-sector lending.

3. Alternative and online lenders

Fintech platforms offer fast, short-term funding online with flexible repayment terms.

• Best for: Businesses that need quick access to working capital or may not qualify for traditional bank loans.
• Keep in mind: Interest rates can be higher, and repayment periods shorter. Always compare the total cost of credit.

4. Microfinance institutions 

These small lenders focus on micro or community-based enterprises. They often provide hands-on support and more flexible terms.

• Best for: Informal traders, township-based businesses, or entrepreneurs starting small.
• Keep in mind: Loan amounts are usually limited, and interest rates vary widely.

5. Supplier or trade credit

Some suppliers offer 30- to 60-day trade credit accounts to reliable business customers.

• Best for: Building a credit profile while managing cash flow.
• Keep in mind: Missed payments can damage both your credit reputation and supplier relationships.

Grants and loans in South Africa for SMEs

In South Africa, some SMEs may qualify for government grants or loans.

Government grants are typically offered via government agencies such as the Department of Small Business Development (DSBD), the Small Enterprise Development Agency (SEDA), and the National Empowerment Fund (NEF).

The Small Enterprise Finance Agency (SEFA) provides loans directly to SMEs, from R50,000 up to R15 million, while the Industrial Development Corporation (IDC) offers loans in the vicinity of around R1 million to a maximum of R1 billion.

Although competition is fierce for government grants and loans, and loan terms can be stringent, many small businesses may qualify. Read more about how government supports small business development.

South African banks remain a primary source of business loans for small businesses in South Africa, with all major banks offering various loan products tailored to SME needs.

In addition, many private lenders offer small business funding. However, borrowers should exercise caution when dealing with private credit providers, as lending practices, interest rates, and terms can vary dramatically.

It’s essential to verify credentials, read all terms carefully, and ensure any lender is registered with the National Credit Regulator (NCR) before proceeding.

Key differences between business loans and personal loans

Business loans and personal loans may seem similar because both give you access to credit, but there are important differences. It’s helpful to understand when a personal loan may be more effective than a business loan.

If you’re just starting as a sole trader or small business owner, getting a business loan can be challenging. Banks usually want to see financial records, audited statements, or a trading history – things a new business often doesn’t have. In these cases, a personal loan may be more realistic.

A personal loan could make sense if:

• You don’t yet have a business track record: If your business hasn’t been operating long enough to qualify for a business loan, you can rely on your personal credit history instead.
• You have smaller funding needs: For start-ups that only need a modest amount – for example, to buy equipment or cover initial setup costs – a personal loan may be sufficient.
• You require fast approval: Personal loans are usually quicker to process than business loans, which often require detailed business plans and financial projections.

However, it’s important to remember that with a personal loan, you are personally liable for the debt, even if the business fails. This makes it riskier for your own finances, so weigh the pros and cons carefully before committing.

Here are the key differences between a personal loan and a business loan.

Can a personal loan help you with your small business set-up? Find out now if you qualify.

Types of business loans in South Africa

According to Steyn, the most common types of business loans in South Africa include:

Note that a personal loan may be suitable for a sole proprietor or micro-business unlikely to qualify for a business loan.

Find out which personal loans may be most suitable for your needs.

Business loan options from South African banks 

Banks understand that every business is unique and there’s no “one-size-fits-all" approach to funding, says Jenine Zachar, head of value propositions and client experience at Business & Commercial Banking South Africa, Standard Bank Group.

A bank that’s focused on business banking will be able to offer you funding at every stage of your development, whether you need working capital, a term loan to finance your next big move, or asset-based finance to purchase vehicles, equipment, or property.

The information below sets out what South Africa’s largest banks offer by way of business loans. All information was supplied by the banks themselves at the time of publication.

Absa

Absa has a wide range of lending products for everything from start-ups to mature businesses.

1. Business term loan

The business term loan is used to finance developmental projects, business expansion, or business purchases.

The loan can be repaid over a period of up to ten years and is structured in line with the client’s unique needs. Absa looks at affordability but also the client’s ability to offer security in the form of guarantees, tangible assets, and/or the personal suretyship of the shareholders and/or directors or members.

2. Business revolving loan

A business revolving loan is a short- to medium-term borrowing option, which is typically appropriate for general business purposes. Clients need to pay back a certain amount before they can draw money again.

The minimum loan amount is R10,000 and the minimum repayment is 1.5% of the money borrowed. Security of the principal will be required.

3. Agriculture BEE finance

Black-owned SMEs in South Africa can apply for agriculture BEE finance of up to R15 million, to be repaid in a period of up to ten years.

4. Alternative lending solutions

Absa’s alternative lending solutions provide access to finance opportunities to new and profitable existing companies that don’t qualify for finance. This is because they don’t have collateral when it’s required, or don’t have enough.

African Guarantee Fund: This offers a 50-75% guarantee in terms of security for all sectors.

Automotive finance: This offers a 90% guarantee, mainly for aftermarket industry loans. You can borrow up to R1 million.

Capitec

Capitec business banking offers a straightforward range of business loans.  

1. Business term loan 

This product is structured for a growing business and can be used to finance capital expenditure, expand and grow your business, change your business premises, or even acquire another business.

You can also use it to bring outsourced services in-house, restructure your company’s balance sheet, consolidate and manage your business debts, and more.

Repayment terms are up to 60 months, and the interest rate is linked to prime. For example, for a loan of R25,000 payable over 12 months, you can anticipate an interest rate of 12.5 to 28%.

You must have been operating as a business for at least two years to qualify. Collateral or security may be required, depending on how much you want to borrow.

2. Pay As You Trade loan

This loan of up to R2 million requires no collateral, has a personalised interest rate, and can be repaid through a fixed percentage of daily transactions over either 12- or 36-month terms.

To qualify, you need a minimum of three months of card transaction history, and the amount you qualify for will be based on your card transaction history and credit repayment behaviour.

Repayment is made using a percentage of future sales through Capitec’s card machines and the qualifying amount is based on card transaction history and previous credit repayment performance.

You can qualify for a re-advance once 50% of the loan has been repaid.

FNB

FNB offers a comprehensive range of financial products and services to businesses of all sizes, from start-ups to large enterprises. These include:

1. Business term loan

This loan is suitable for FNB Business Account holders looking to raise capital for growth, asset acquisition, or other medium-term business expenses.

You can apply for amounts starting from R2,000, with flexible repayment terms ranging from three months to five years, and optional loan security.

Interest rates are tailored to what you can afford and how long you need to repay, with fixed monthly payments that make budgeting easier and steadily reduce your debt.

2. Business revolving loan

This facility is ideal for FNB Business Account holders who require ongoing access to funds to manage cash flow, finance inventory, cover unexpected expenses, or support operational growth.

The minimum loan amount is R20,000, with flexible access to reuse funds any time after repaying just 15% of the original loan amount. Credit remains available as long as your account and loan are in good standing. Fixed monthly repayments make it easy to budget.

3. FNB Cash Advance

FNB Cash Advance is ideal for merchants needing quick and flexible access to funding to bridge cash flow gaps. It leverages point-of-sale data from FNB Merchant Solutions – including Speedpoint, Speedee, SpeedeeQR, and SpeedeeApp – to generate pre-approved funding offers.

Flexible terms are available, typically over 12 months. Repayments are automatically deducted as a small percentage of daily card sales, keeping them aligned with your business’s cash flow – you pay as you trade. You can qualify for a re-advance once 50% of the loan has been repaid.

Nedbank

Nedbank offers a range of banking solutions for start-ups to big businesses.

The bank’s SimplyBiz platform assists you with everything you need to grow your business, from tools and free advertising to more than 170 business templates. You can explore funding options through the SimplyBiz platform, including loans with personalised interest rates.

Nedbank offers the following:  

1. Startup bundle

While not a loan per se, the start-up bundle gives small businesses six months’ free banking while they’re establishing themselves.

The offer is for sole business owners with less than R3 million turnover a year, and is only available online.

2. Business Pay-as-you-use

This offer is for business owners who are just starting out, or those with lower transactional volumes.

Standard Bank 

Standard Bank has a range of working capital loan products to support businesses, says Zachar. These include:

1. BizFlex short-term business loan

The BizFlex loan helps if you need working capital or want to grow your business.

It operates on a “pay as you earn” model, with repayments a specified percentage of your daily revenue.

To qualify, you need an existing Standard Bank business current account and the ability to apply and sign digitally. The total cost of the loan, including interest, will be provided upfront and interest rates are personalised.

In addition to the above, business clients can use Standard Bank’s SimplyBLU card machines to select repayments to come off their card sales. This is a new repayment option in addition to the existing option for repayments to be made against total revenue through your business account.

To be eligible for BizFlex, you need to be an incorporated entity with annual turnover of at least R1 million and have had an active Standard Bank business current account in good standing for at least six months. The amount you qualify for is dependent on your past revenue earned and your assessed ability to repay.

2. Business revolving loan

This allows the business to borrow funds again once 15% of the loan has been repaid, allowing the business to be ready to take advantage of opportunities.

You need a Standard Bank Business current account to qualify for a business revolving loan. Your interest rate is personalised and linked to the prime rate, and if the interest rate changes, it will affect your repayment term but not your monthly amount. The minimum repayment term is 60 months.

3. Business term loan

This is useful for businesses that need a structured loan to finance big, once-off needs.

Loans start from R50,000 with fixed repayments and terms between three and ten years, giving the business a capital injection to support its expansion goals.

Your business must have been trading for two years or more, with an active business transactional account at any bank. Your interest rate will be personalised and linked to the prime rate, and if the interest rate changes, it will affect your repayment term but not your monthly amount.

You can use Standard Bank’s Business Term Loan Calculator on their website to work out your estimated monthly repayment amount based on loan amount, interest rate, and term.

Knowing when to borrow – and when not to

As a business owner, it’s important to understand when you need a loan – and when you don’t. Although access to capital can accelerate your growth, taking on debt isn’t always the good money choice, especially if you’re an early-stage start-up.

Before you apply for a loan, ask yourself if it’s truly necessary. Can you get by and scale more gradually? Do you have a clear plan for generating returns that will cover loan repayments? Patient, disciplined saving can be just as helpful to your long-term success.

Sometimes the best thing you can do for your business is delay expansion, reduce your expenses, or explore alternative funding options like:

• Personal savings or investments – using your own capital avoids debt and interest payments
• Grants and competitions – many organisations offer non-repayable funding for start-ups
• Revenue-based growth – reinvesting profits as they come in, rather than borrowing upfront
• High-interest savings accounts – building a cash buffer while earning returns on your reserves

The key is matching your funding strategy to your business stage and risk tolerance.

Borrowing makes sense when you have a proven revenue model and a clear path to profitability. If you’re clear on that, then consider whether a personal or business loan would serve you best.

Whether it’s for a big goal or a small emergency, a personal loan can help you move forward. Register to apply for a personal loan today.

FAQs

What is the minimum credit score for a business loan in South Africa?

There is no single minimum credit score for business loans in South Africa – each lender sets its own threshold and considers multiple factors. If you run a sole proprietorship, lenders will review your own personal credit score. It’s important to understand that credit scoring bands vary among different credit bureaus. Read JustMoney’s guide to understanding your credit score. More established businesses can also have credit scores, with a number of factors taken into account.

 Can I get a business loan without collateral?

Yes, it is possible to access a business loan without offering physical collateral in South Africa, although traditional lenders expect fixed assets or guarantees. Unsecured loans usually come with high trade-offs, such as higher interest rates and stricter lending requirements. Be clear about the terms and conditions of a loan before borrowing, and only borrow from lenders registered with the National Credit Regulator. 

What’s the difference between a start-up loan and a standard business loan?

Start-up loans are designed for new businesses with little or no trading history, meaning lenders rely heavily on the owner’s personal credit score, business plan, and projected cash flow rather than audited financials. These loans are often smaller, have shorter repayment terms, and may carry higher interest rates or require personal guarantees instead of business assets as collateral. Standard business loans, by contrast, are aimed at established enterprises with proven revenue, financial statements, and trading history, allowing for larger amounts, longer repayment periods, and often lower interest rates.