Business Loans

Business loans offered by CABS can either be short term business loans or medium term loans.

Short Term loans
These are granted for a period of up to 12 months and are for financing the day to day working capital requirements of the customers.

Medium Term Loans
These are granted for period ranging from 12 moths up to 36 months. They are mainly granted to enable customers meet their capital expenditure (capex) requirements, with repayments being made on a monthly or quarterly basis.

Interest rates on both the short term loan and the medium term loan depends on the risk profile of the applicant.

The Agritrade loans are available to agribusiness enterprises involved in the trade of agro-produce from small holder farmers, provision of inputs to small holder farmers and contract farming. Agritrade loans are restricted to financial crop production, working capital and or purchase of capital equipment.

Terms of Agritrade Loan:

• Interest rate 11%
• Establishment fees of 2%
• Valuation 1.5%
• Tenure is 12 months
• Minimum loan amount $10 000, Maximum loan amount $200 000
• A bond will be registered on security provided and costs covered by the client

Bank guarantees are sureties that we provide to clients who do business with us for purposes of facilitating their business with third parties. Our role is to provide comfort to third parties so that the SME is able to enter into various credit transactions.

There are various types of guarantees that can be granted depending on the nature of the business that the borrower intends to enter into with third parties as given below:

• Payment guarantees
• Bid bonds
• Advance payment guarantees
• Performance bonds
• Letter of undertaking

Guarantee commissions depend on the risk profile, the nature and duration of the transaction. Clients intending to access this facility should contact their Personal Banker or CRM or SME Banking centre for more details.

The borrower is allowed to overdraw their account in excess of their credit balance to the extent of the set limit.

Thereafter the borrower is expected to make regular deposits into the account to fluctuate the overdrawn balance between a credit position and a negative positive over the life of the facility. This facility is only granted to borrowers to finance working capital and specifically for those businesses whose cash cycles are shorter than 30 days.

Borrowers requiring overdraft facilities should enquire from their Customer Relationship Manager and discuss their business cash flows to determine if they qualify for the facility. Interest on overdraft is calculated on the daily balance and debited to the account monthly.

Order finance facilities
An order finance facility is granted to a borrower who wishes to finance the fulfilment of a specific order or contract. This type of loan is usually required to finance either the purchase of raw materials or stocks for delivery to their own customer (usually referred to as the off-taker) within a specific period of time (delivery period).

Project finance
This facility is similar to order finance except that it is granted to a borrower to finance specific projects under a contract. Examples of projects are construction projects, mining projects, farming projects, ICT etc. The borrower normally receives progress payments on the basis of completed stages and these are used to repay the loan.

Invoice discounting facilities
We provide invoice discounting facilities to borrowers who would have fulfilled an order/ contract and are awaiting payment from the off-taker. This is meant to facilitate debt collection as well as to improve the borrower’s cash flow cycle.

Bank guarantees
A bank guarantee is an irrevocable promise made by a bank or lending institution to pay a specified amount of money to its client’s debtor should that particular client fail to meet its contractual obligations. There are a number of guarantees that we offer and these depend on the nature of the obligation that the client wishes to create. Below are the forms of guarantees that we offer:

• Payment guarantee
  A payment guarantee is used to guarantee payment to a third party as when an obligation falls due and the principle borrower is unable to meet the obligation.
• Bid bond
  This is a guarantee that is usually required to support a tender bid. It is required to cover the organiser’s expenses of running another tender process in the event that the bidder fails to accept the tender award or revokes their bid after the tender has been awarded.

• Performance guarantee/ bond
  A performance bond is used to secure a third party against failure by its client to fulfil its contractual obligations. The guarantee will then be used to compensate the third party for the loss incurred due to non-performance.

• Advance Payment guarantee
  This is a guarantee that is used to secure a third party who makes an advance payment to a supplier. In the event that the supplier fails deliver the third part can claim re-imbursement of the funds from CABS. 

If you are a business who is supplying larger corporates and require funding to acquire raw materials, stocks or to provide services then all you need is to contact your Personal Banker, Customer Relationship Manager or the SME Banking Centre on the contact details provided below to enquire about our order finance facilities, contract finance, and invoice discounting facilities.