Funding Your Future: (Part 8) A Series on SME Finance Options in South Africa Business Credit Facility

As we near the finish of our business funding series, we wanted to share the second-to-last solution before we close off: Business Credit Facilities.

This flexible funding option gives your business access to a pre-approved line of credit whenever cash is needed. Unlike traditional loans, you only pay interest on the funds you actually use, making it ideal for managing cash flow, seasonal fluctuations, or unexpected expenses. Let's explore more on Business Credit Facilities and how it may be the best flexible funding solution for your business when you need it.

How It Works:

You apply for a business credit facility and the lender approves a maximum limit based on your business’s financials.

Whenever your business needs funds, you draw from this limit.

Interest is charged only on the amount withdrawn, not the full facility.

You repay borrowed amounts according to the facility’s terms, freeing up credit again for future use.

Why It Works:

Get flexible access to funds by drawing from your approved limit whenever you need it.

Saves costs compared to a lump-sum loan.

Perfect for covering operational expenses or short-term working capital gaps.

Funds can often be accessed faster than applying for a new loan each time.

Real-World Example:

A leading South African health and wellness retailer, uses a business credit facility to manage inventory purchases and seasonal stock demands. By accessing funds as needed, they ensure they can meet customer demand without tying up cash in excess inventory or missing sales opportunities.

Key to Remember:

A business credit facility gives SMEs the flexibility to respond quickly to opportunities or challenges, without the burden of paying interest on unused funds.