Over the past weeks, we’ve unpacked a range of funding solutions available to South African SMEs, from invoice discounting to secured loans, merchant cash advances, and more. This week, we’re wrapping up our series with a fairly new but powerful option: Business Rescue Finance. This type of funding is designed for businesses in financial distress but still have the potential to recover or be successfully sold. It’s a lifeline that can help keep operations running while implementing turnaround strategies.
How It Works: Business rescue finance is tailored for companies facing significant financial pressure. To qualify, your business must:
Be in financial distress but capable of recovery or sale.
Have assets (including debtors) that can serve as security for a credit facility.
Be a viable business that can realistically be turned around.
Have updated financials, an annual turnover of at least R5 million, and be trading for 3+ years.
Real-World Example:
Imagine a manufacturing company in Johannesburg that hit severe cash flow challenges due to supply chain delays and mounting debt. Instead of shutting down, they secured Business Rescue Finance backed by their debtor’s book and equipment. This gave them the liquidity to stabilise operations, renegotiate supplier contracts, and implement a recovery plan. Within 18 months, the business was back on track, retaining jobs and protecting stakeholder value.
Key Insight:
Business Rescue Finance is not about prolonging the inevitable, it’s about giving viable businesses a fighting chance to recover, restructure, and grow stronger. For SMEs, this can mean the difference between closing doors and turning a setback into a comeback.
That’s a wrap on our FundingYour Future Series! We hope these insights have helped you better understand the wide range of funding options available to South African SMEs.
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