Growth finance is structured funding for established businesses that need capital to expand, acquire a competitor or buy property. Spartan’s Growth Finance offers South African businesses loans from R1 million to R75 million, combining short- and longer-term facilities into one package built around the business’s expansion plan. Businesses need at least 3 years of operating history and R10 million or more in annual turnover.
What is the difference between growth finance and standard business finance?
When should a business use growth finance?
Growth finance suits established businesses entering a structural expansion phase. Typical use cases include:
- Acquiring a competitor or a business in your value chain. Time-sensitive opportunities, such as a distressed or retiring competitor, require speed. Most lenders often don’t fund business acquisitions by SME’s and entrepreneurs, which leaves many owners in a financing “no man’s land”. See Business Acquisition Finance.
- Buying your business premises. Other lenders often provide a bond covering only 60% to 70% of the purchase cost, so growth finance can help bridge the remaining gap. See Property Finance.
- Expanding capacity, locations or capabilities. This includes increasing output, opening new sites, upgrading technology or fulfilling large contracts, where standard asset finance doesn’t offer the type of structured finance needed.
When should a business use growth finance?
2 obstacles come up repeatedly:
- The understanding gap. Growth strategies are unique, and conventional lenders rarely have the capability or process to understand your expansion plan, industry or long-term potential. This can lead them to read growth opportunities as unnecessary risk.
- Standardised lending criteria. Most lenders prefer standardised criteria, so complex scenarios such as acquisitions are hard for them to structure around your cash flow model.
Who qualifies for Spartan Growth Finance?
| Requirement | Details |
|---|---|
| Loan amount | R1 million to R75 million |
| Operating history | 3 years or more in operation |
| Annual turnover | R10 million or more |
Frequently asked questions
What is growth finance?
Growth finance is structured funding that combines short- and longer-term facilities into a package structured to a business’s expansion plan, such as an acquisition, property purchase or capacity increase.
How much can I borrow through Spartan Growth Finance?
Spartan’s Growth Finance covers loan amounts from R1 million to R75 million.
What turnover do I need to qualify?
Spartan requires annual turnover of R10 million or more.
Can I get finance to buy a competitor if my bank said no?
Spartan funds business acquisitions, including buying a competitor or a business in your industry value chain. Eligibility depends on the criteria above and the merits of the deal.
What if my bank will only fund 60% to 70% of a property purchase?
Growth finance can be structured to help fill the gap between the bank’s bond and the full purchase cost.
Do I need collateral?
Spartan is a secured lender and takes a structured & creative approach to its collateral consideration.
How long does approval take?
Business owners can complete the online eligibility assessment and then, collecting relevant documentation and meeting with the entrepreneur to get to credit committee and then decision, can take a few weeks.
About Spartan
Spartan has been funding South African businesses since 1981 and is an authorised Financial Services and Registered Credit Provider and member of the SME Finance Forum.
Check if you qualify
Ready to expand, acquire or develop? Check your eligibility or apply online. You can also call 011 886 0922 or see how the process works.
