ABSA

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ABSA SMALL BUSINESS BANKING KHULA CREDIT
GUARANTEE SCHEME
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1. KHULA GUARANTEE SCHEME

• THE KHULA
• GUARANTEE
• SCHEME

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Purpose of Khula Credit Guarantee Scheme

• Finance made available to clients who do not
  fully satisfy the Banks normal lending criteria
• Due to insufficient capital
• or insufficient security to offer in relation to
  the Credit Risk.

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Who Qualifies as Candidates?

• S A Citizen
• Business conducted with a profit motive and
  viable
• Owner operator on a day-to-day basis
• Majority shareholder, no dual occupation
• Expertise / skills relative to the industry
• The required contribution
• Empowerment
• Start up R10 000 to R350 000
• Existing business R10 000 to R3 000 000

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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

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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

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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

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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.

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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

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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

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MATRIX TABLE
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Fathima Osman Khula Specialist ABSA NEW
ENTERPRISE BANKING ABSA TOWERS 2ND
FLOOR 031-3669111/9419(office)
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END

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• Engagement