Posted on January 11, 2021 by Staff Writer
First National Bank (FNB) is one of the leading banks in South Africa, well-identified with its Acacia tree symbol and considered best in technology. FNB Business loan caters for businesses looking for funds to expand, acquire assets or finance other business-related expenditures.
Your business can get a loan amount from as little as R2 000 from the FNB Business Account.
- Businesses with an active FNB Business Account in good standing
- Should have been operating for 15 months or more
- With an annual turnover of more than R500 000
- Good credit history/ additional credit criteria
FNB Business Loan Application
The application can be done online by using the FNB App or website or else in any of their branches.
Existing FNB Business Account Holders can get finance of less than R400 000 without even submitting any supporting documents or collateral.
However should you need business finance of more than R400 000, then your application will have to include:
- Submitting the FNB business loan application form together with;
- Signed financial information, which comprise of the annual financial statements and year to date management accounts
- Also provide the company Projections that is the cash flow statements, income statements and balance sheets
The FNB online banking services, gives you the option of processing the applications on their website, or from the FNB App which can be downloaded to your device.
If you don’t have an existing FNB business account then your application should include:
- 6 months’ bank statements
- A business plan to demonstrate the viability and sustainability of the business
- Signed financial information (annual financial statements and year-to-date management accounts)
- Projections (cash flow statements, income statements and balance sheets)
- Should your application be successful, you may then be asked to open the FNB Business Account
- You may be requested collateral security against the loan
Terms of repayment
The FNB medium to long business loan terms vary from a period of 3 months to 5 years. During the agreed loan term, you will be paying off using monthly debit orders from your FNB Business Account.
FNB does not charge the same interest rate on loans advanced. For your FNB Business loan the interest rate charged is negotiable and risk related. Even though a longer loan term may reduce your monthly installments, the interest rates tend to be higher as compared to a shorter term.
There is a once-off administration fee of 1% of the loan amount charged when the loan is paid out. Usually, referred to as an origination or application fee charged.
FNB Business Loan Competitive Advantages
Flexible loan terms
You are able to structure your term loan so that the repayments align with your cash flow. If your business is making enough money to repay the loan in the shortest time possible then you opt for a shorter loan term.
Also, if your cash flow doesn’t allow you to pay high monthly instalments, then you can go for the longer loan term with a bit lower instalments.
The FNB monthly instalments are fixed, allowing you to know what you are going to be paying each month, affording you a chance for proper planning and budgeting.
The First National Bank business loans have competitive interest rates, but they vary depending on your profile as the borrower. The terms and conditions are quite flexible, especially when it comes to the loan amount, the collateral, the term of the loan and the repayment schedule.
Existing FNB Business Account Holders can simply start the application process in their online banking account. They also have the privilege to get their application processed without being requested to submit any supporting documents or collateral.
Also, FNB created a credit score methodology which allows for a credit facility without all the paperwork, but only after having the account for over a year.
FNB Business Loan Competitive Disadvantages
When FNB advances a business loan, 1% of the loan amount is levied as a once-off fee for administration costs. Meaning, if you were approved for an R100 000 loan, you will only receive R99 000 because the R1 000 has been deducted for admin fees.
When it comes to business bank account, FNB may be extremely conservative. When you open the business account, you still have to well manage it for at least 1 year before they can give your business a loan.