Objectives Of The Fund
- Alleviating unemployment amongst the youth through business initiatives.
- Financing of start-ups, expansions and buy-in/out operations.
- Companies, co-operatives and close corporations owned, managed and operated by the youth.
- Based on capital needs, a minimum of R50 000 and not exceeding R500 000 per investment.
- Property financing;
- Debt financing
- Purchasing of shares
- Non-income generating assets
- Financing of Vehicles/Automobiles for private use and/or commuter services is explicitly excluded
Loan Repayment terms
Interest Rate (Fluctuating)
- The interest rate charged will be based on the prevailing prime rate plus 1%.
Grace Period for Payments
- The grace period will depend on the nature of a project, which in the case of a new business shall not exceed three months from the date of first disbursement.
- The interest charged during the grace period shall be capitalized.
- In case of an existing business the grace period may not exceed one month from the date of first disbursement.
- No equity contribution shall be required for this loan product.
- A 100% security cover is desirable; however, a minimum cover of 60% may be considered depending on the product and capital required. The viability and risk of the venture should also be considered for the purpose of determining the security cover.
The following fees and costs shall be payable by all applicants:
- Initiation fees equal to 2% or R2 500plus VAT(whichever is lesser) of the approved loan amounts exceeding R50 000 is payable before implementation and disbursement of the loan. Initiation fee may be capitalised by client if requested.
- Security registration costs shall be borne by the client and may be capitalised.
- The borrower will be covered by the FDC group scheme insurance for projects limited to a maximum capital exposure of R300 000 per loan (the premium to be included in the monthly instalment); or cession of own life cover policy on total loan balance.
- Comprehensive insurance to be ceded to FDC.