The Best Business Loans in Kenya in just one more click
Compare the best options on the market and choose the one which best adapts to your day to day needs.
Further Below: Our Guide To Business Loans in Kenya, Everything you need to know.
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We marshal up updated information of all it takes to get a business loan in Kenya, from all the documentation required to the types of credits or grants. In a matter of minutes, you’ll be equipped with the right information about the best business loan in Kenya at the moment.
At the onset of the pandemic, Kenya, just like many other countries in the world, started putting in place measures that would cushion businesses from the virus’ harsh ravages. On March 25, 2020, the Kenyan government detailed a number of interventions it was making to stabilize the different aspects of the economy that were already facing the adverse effects of Covid-19.
The Kenyan Government took the following measures to sustain companies through the pandemic:
Additionally, the government of Kenya reduced the turnover tax from 3% to 1% for the sustainability of all MSMEs.
Just like in the case of businesses, every business loan has its specific terms of application and operation. While the type of business loan you get depends on your profile business, here are some of the considerations to make before applying for one:
With the advancement of technology, everyone wants to break away from the conventional way of acquiring loans. Hence, the emergence of other loan providers to make loans more accessible.
Even in the face of other loan lenders, banks still maintain a strong grip on financing businesses. While many large and consolidated companies still get their financing from banks, even MSMEs can now get their portion. Banks are now financing all types of businesses provided all the requirements are met.
Many Kenyans are turning to these lenders after learning that their services are often more attractive and cost-friendly than bank deals. Their acquisition process is easy and fast as it’s all carried out online.
Through these online platforms, a borrower is connected to a lender who provides the working capital, according to their wishes. The process is fast and within a couple of days, you’re able to get the funds and get moving.
One important nugget: start by conducting a serious analysis of your business to determine which type of loan will mean good to you.
The Kenyan Law has put in place some guidelines that every business loanee needs to adhere to. The guidelines may differ with the type of business. However, below are the guidelines that cut across every business that seeks funding in Kenya:
In Kenya, a business line of credit works just like a credit card. With it, you have access to funds and can withdraw whenever you wish. Good thing, you’ll attract interest based on the amount you withdraw and not on the whole amount you’re able to access. A business line of credit is different from a credit card, though. With it, you’re able to offer collateral, which will mean lower interest rates and you’re able to access more funds.
This applies when you need immediate financing. It is a type of loan where you may decide to sell your account invoices to third parties as security. This is mostly an option for small-scale businesses which are still trying to grow their capital.
Lenders provide the loanees with movable business assets such as machinery, vehicles, among others. You will be required to make a certain amount as a deposit before the asset is shipped to your location. You’ll be required to make monthly installments to complete the total amount (value of the asset plus the interest).
Equity Crowdfunding
Just as the name suggests, crowdfunding involves getting business funds that have been raised by many persons or entities. Through crowdfunding platforms, you can sell your investment instruments such as business shares, among others. Two main examples of crowdfunding platforms in Kenya: M-changa and M-pesa Paybill. (M-pesa Paybill is mostly used for charity purposes.)
Business Angels
Business Angels platforms connect borrowers to potential investors. Business Angel investors do not work with an individual business proprietor, Instead, the managers select where they will invest. Once they select your company, they’ll always be part of the management. You might miss the opportunity of being funded by Business Angels if you’re only working on a small project.
Venture Capitals
As an entrepreneur, operating a completely new business can be taxing. Venture capitalists come in during your business’s early stages to help it grow. They incorporate their skills to efficiently run your business until it is at a stable level. Once at this stage, the capitalists will sell their equity holdings.
While this concept is not widely embraced in Kenya, it is governed by the Capital Markets Act (CMA).
Small business grants
Small businesses can now enjoy grants from organizations like the International Finance Corporation (IFC) which provides small and medium business owners with the skills as well as funds they require to keep their business going.
Subsidies
Kenya offers a long list of subsidies to different groups of beneficiaries, starting from individuals, businesses, students, as well as non-government organizations (NGOs).
What this page is for: we use the best available information to prepare easy-to-understand information about the different types of loans that are available in the Kenyan market, and which entities and platforms we can use to get started. We also provide you with guidelines to get the right funding which ensures your business obtains liquidity and on the other hand, a seamless repayment experience.
Source: the above information has been obtained from a number of reliable sources including the Kenyan Law, the Central Bank of Kenya
Methodology: our team of professionals has obtained the above information through thorough online research.
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