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 Burundi, Everything you need to know.
KCB Bank Burundi
- Attractive loan limits
- Flexible repayment period of up to 48 months
- Friendly interest rates
- Can be secured, unsecured check off loan, or a salary advance
- High loan limits
- Available to both salaried and self-employed individuals
- Quick approval
- Loan offered for various purposes
- No security requirements
- Loan amount based on salary
- Loan repayment period of up to 7 years
- Interest rates of up to 16%
- Loan acquired in a day
- No collateral required
- Top up option allowed
- Life insurance cover
- Allows loan transfers from other banks
- Loan amount of up to 40% of your salary
- Competitive interest rates
- Flexible repayment period
- Fast loan processing time
- Quick approval
- Easy qualifying criteria
- No security required
- Quick turnaround time
Business Loans in Burundi, All You Need To Know:
Hang tight to know everything about financing your business in Burundi. We provide all the necessary information including key factors to consider before hiring a business credit, the best offers at the moment, and how to pick one that’s best compatible with your financial needs.
[UPDATE] What economic measures has the Government implemented for companies through covid-19?
Right at the onset of the coronavirus pandemic, the Burundian government stepped in to offer protection for businesses and companies from the harsh economic effects of the same. The government came out to give grants, provide new guidelines regarding the provision of grants and loans, and make the loans more available so that even the smallest of businesses could survive.
The government went as far as reducing and suspending tax repayments, which would, otherwise, pressurize small businesses during the hard economic times.
- Many policies were announced for the sake of protection The Government announced the “New Flemish protection mechanism” that allowed businesses to apply for a tax-free premium. The premium would act as compensation for businesses with at least a 60% loss of turnover.
- Businesses would face a little more lax eligibility requirements when taking out a loan. Moreover, the conditions of the loans were more attractive.
- The deadlines for clearing the registration and inheritance tax were postponed to January 2021 the conditions the same were favorable.
- Payment of road taxes for businesses was deferred for 4 months as well as the immovable withholding taxes.
- Individuals applying for startup and SME loans would receive tax incentives
- The government provided guarantees for business bank loans
- The government scrapped the regional City Tax for the whole of 2020.
All holders of authorizations had a chance to have their authorizations extended, under the observance of particular conditions. In that way, the holders received exporter authorization without customs auditions.
Distinguishing types of company profiles
There are different business loans curated for different types of business profiles. Each type of loan is unique in terms of the financing conditions it offers. Likewise, the business receiving the finance will be required to have particular characteristics to qualify for a certain loan type.
Let’s have a look at the different forms of businesses:
- Entrepreneurs: this refers to a business that’s only imagined and probably planned for but yet to exist. The entrepreneur comes up with a business idea and may go ahead to plan for it. The materialization of this business depends on the availability of funds.
- Start-ups: this type of business is a step ahead of entrepreneurs. The business already exists and may have started operations. However, their scale of operations is still small and unstable, hence, it might be making some losses or low turnovers. The type of financing the business receives might be small and is designed to help steer its growth.
- Consolidated companies: these companies are long-standing and are a little more stable than start-ups. They have gained ground and made profits more than losses. These companies qualify for bigger loans than start-ups because their income demonstrates their ability to reimburse them.
- Large companies: as their names suggest, these companies operate on a large scale, which might be national or international. They enjoy huge turnovers (in millions of euros), and hence, qualify for huge loans.
- As legal entities: these refer to employees or professionals who own a business. They qualify for loans designed for individuals. Their businesses may be treated as either ‘start-ups’ or ‘consolidated companies’ depending on the profits realized.
- As natural persons: these are people without employment but have some form of income. They qualify for personal loans curated to finance specific projects such as financing a car, buying electric appliances, etc.
Characteristics of business loans
They vary with the type of company profile and type of credit we sign up for. However, our negotiation skills will come into play when we’re looking for the best financing available.
So, what are the characteristics to look out for in any business loan?
- Cost. This is always the first consideration to make. You want a loan with attractive rates so that the loan can improve your financial status and make the repayment process easy. The cost of the loan depends on an entity, hence, be sure to consult different entities to compare the costs.
- Amount. This depends on the purpose of the loan and the business profile. Moreover, the amount varies with an entity.
- Purpose. Different businesses have different needs such as working capital, investments, consolidating debts, clearing arrears with our suppliers, importing goods, and collecting invoices among others.
- Linkage. Especially in banks, financing always comes with related products such as insurance, business accounts, or other products of mandatory recruitment.
- Repayment period. This may be longer or shorter depending on the type of credit and the entity providing the loan. Some lenders may give loans for 6 months while others for 120 months.
- Grace period. This refers to a period when the lender allows the borrower to pause the loan repayment. This mostly happens in the initial stages of repayment.
- Guarantee. These are normally attached to big loans where the lender will require “payment insurance” with a guarantee or collateral.
- Speed. This is one of the most important factors to consider, depending on your financial needs. Some lenders take months to release the funds while others take days.
- Repayment conditions. Entities set up different repayment conditions. While some may have us make monthly installments, others may have us pay all the finances (principal amount, accrued interests, and other charges) at the end of the repayment period.
Where to get business loans
The advancement of technology has allowed the creation of various types of non-bank lenders that design different financial products. Hence, borrowers are spoilt for choice and can get financing that best addresses their needs. Below are the currently available options we can consult when in need of financing:
- Banks: they still have a strong footprint in the lending market. Banks are known to offer big loans to big companies. Hence, they may have slower concessions, longer repayment periods, attractive rates, and strict eligibility parameters. Nonetheless, some banks offer loans to SMEs under attractive conditions.
- Companies and private capital lenders: the application process and the processing of the loans happen online. Hence, the concessions are fast and hassle-free. The conditions of these loans are as attractive as those of banks, and may at times be more attractive.
- Alternative financing platforms for crowdlending: these are online platforms that link a business owner looking for financing with a private investor. The investor has the prerogative of whether to invest in the borrower’s company or not. Once an investor selects our company, the processing of the loan will happen in at most 48 hours.
Be sure to conduct a thorough financial audit before setting out for a particular loan.
Business loan conditions
After finding out that you need a loan and choosing the lender of your preference, the next step will be to determine whether you are ready to work with the lender’s set conditions. Below are the conditions you’ll find for business loans in Burundi:
- National registration: the Burundian Law regulates financial markets and financial products offered by lenders. Entities will only offer to finance companies that have their fiscal headquarters in Burundi and are in compliance with the regulations of the Burundi financial markets.
- Annual income: entities offering to finance will require us to provide documents showing the annual records of our company. This will prove to the entity that the company has been running and making certain profits at certain times.
- The seniority of the company: different entities require the business to be running for different numbers of years. Some may require 1 year while others require 5 years. This is an important requirement to meet since the financing depends on the solvency of the company.
- Credit history of the company: lenders will only want to offer financing to companies with creditworthiness. In this way, the lender is assured of the borrower’s loyalty to repay the loan.
Entities set different requirements for the above conditions. For instance, they may set different amounts of annual income.
Documents needed to get funding
Entities will require several documents that show the financial status of the company.
Some of them include:
- VAT return from the previous year and the current year.
- Income tax return.
- Bank statement (if in another bank).
- An updated balance sheet of the company’s turnover.
- Proof of payment of Corporate Tax.
The entity may require you to send the documents online, via mail, through a courier, or physically drop them off at the entity’s office.
Other forms of financing for companies
- Business credit lines
Business lines of credit offer us a certain amount of money and allow us to reserve it and take it out in bits as needs arise. This type of financing requires us to repay the principal amount we’ve taken out so far and its interests. This is different from loans that require us to repay the whole amount we took out.
This mostly suits the self-employed and SMEs where the lender comes in to pay our invoices and clear with the suppliers. We’ll be left paying back the amount used to pay for the invoices and the interest charged. Our terms of payment and conditions depend on the entity.
- P2B or crowdlending loans
Through crowdlending platforms, a borrower is connected to a private investor who chooses whether to finance our business or not. There are multiple crowdlending platforms in Burundi and the services we get depend on the platform we use. The company offering the loan will set the conditions of their products and the amount of loan we get.
This is designed for suppliers who are seeking liquidity for their business. Through the loan, the supplier can collect orders before making deliveries to have liquidity then he will return the money that the lending institution advanced to him after making the deliveries.
- Loans with mortgage guarantee
These are loans only granted to businesses that can provide a property that we can use as a guarantee of payment. These loans may have longer analysis and concessions than other loan types because of the appraisal process involved.
Products to invest in our company
- Equity crowdfunding
The advancement of technology has brought about these online platforms through which private investors and professionals can invest in our project. Our company doesn’t go into any debt since the investors get a share of the business as compensation. Moreover, they get to share in the business’s profits.
- Business Angels
Business angels are similar to equity crowdfunding. However, for business angels, the company decides on whether to invest in our company or not, instead of the private investor deciding as an individual.
As you make this decision, bear in mind that the investor will share in the ownership of the company. Business angels offer to finance big business projects.
- 3F (Friends, Family, Fools)
The 3 F’s, Friends, Family, and Fools offer to finance our business. The conditions of each type of financing are set by the lenders.
Aid for the financing of companies
- Capitalization of unemployment
This involves the collection of all the unemployment benefits we are eligible for. Financing is only provided for the self-employed who wish to start up a business.
About this page, our methodology
About this page: We are committed to assisting you in finding the most suitable financial solution for all your circumstances. We combine the best information about consumer loans and how to compare your options before choosing one to provide you with the most appealing offer at the moment.
Source: The information herein about personal loans in Burundi and their terms and conditions has been sourced from World Bank statistics, the Central Bank of Burundi, and individual banks’ websites.
Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources
About FUNDGECKO: FUNDGECKO is a website that compares online products with its focus being on home economics and personal finance. We provide comprehensive information that will expedite decision making and enable customers to select the best deal, in addition to assisting customers in comparing the available financial products.Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.