The Debt Fund Products
Short-term Working Capital Finance
Our Short-term Working Capital Finance facility is a product that provides funding to cover input costs, such as purchasing raw materials or paying salaries and sub-contractors to ensure efficient day-to-day business operations and enable clients to execute their contracts efficiently.
If you have been awarded a contract to deliver a value addition project, such as the construction of a building or manufacturing of goods, do not let financing hold you back. Speak to us to find out how we can assist you.
Target Clients
SMEs that have been awarded contracts to deliver on a value addition assignment, such as a construction or a maintenance contract.
Professional service providers (consultants) with contracts to deliver services can apply for Working Capital.
Product Features
Funding to be used to cover input costs, such as purchasing raw materials, labour and paying sub-contractors.
Funding will be provided in stages, depending on preceding stage being completed, and invoiced for.
The facility can be for revolving cycles averaging 180 days and for not more than 75% of the awarded contract value.
Typical Value-added Supply Services Contract Financial Transaction Structure:
Large firm (Company A) awards contract to SME entity (Company B) to construct new factory building.
Company B applies for Short-term Working Capital Finance Facility from NamPro Fund to finance the purchase of building materials and cash advances to pay sub-contractors.
NamPro Fund reviews the credit application and on approval, obtains Company A’s commitment to pay all contract proceeds to the Fund.
NamPro Fund pays building material suppliers and sub-contractors directly.
The SME construction company commences building and submits progress payment certified invoices to Company A.
Company A then pays the proceeds directly into the Fund’s account. The Fund deducts amounts due and thereafter releases net proceeds to Company B.
PERFORMANCE GUARANTEES
Performance Guarantees are sureties given by the Fund on behalf of an SME. These guarantees can take the form of an insurance-issued or bank-issued guarantee, with NamPro Fund standing as surety, providing the necessary assurance that the contractor will perform according to the awarded contract.
If you have secured a supply or value addition-related contract and are now expected to provide a performance guarantee, our performance guarantees are just the right product for your needs.
Target Clients
SMEs that have secured supply contracts/value addition-related contracts and are expected to provide a bond security (payment guarantee, performance guarantee, bid bond).
Product Features
NamPro Fund guarantees an undertaking to effect payment, should the contractor fail to perform.
Product can take the form of an insurance issued or bank issued guarantee by the Fund.
Conditional to use of other NamPro Fund products.
Typical Performance Guarantee Transaction Structure
Large firm (Company A) issues contract to Company B with performance guarantee as a requirement.
Company B applies to NamPro Fund for a performance guarantee and other financial requirements.
NamPro Fund appraises tender, client performance and based on risk assessment, issues performance guarantee (against some security).
NamPro Fund issues guarantee and other financing. Once contract is completed, guarantee is released in accordance with contract provision.
INVOICE/RECEIVABLES DISCOUNTING FACILITIES
The Invoice/Receivables Discounting facility enables SMEs to get funding for up to 85% of the value of invoices or receivables for goods delivered or services rendered, where the invoice payment due date falls within a set timeframe.
If you have delivered goods or rendered services, invoiced your client and are still waiting on payment, contact NamPro Fund. Our Invoice/Receivables Discounting facility will help take the load off your shoulders and enable you to operate more efficiently.
Target Clients
SMEs supplying to large buyers or exporters that extend credit terms to their buyers. Extending such credit terms typically puts a strain on the SMEs’ cash flows.
Product Features
Funding will be by way of discounting invoices against goods delivered, with invoice payment due date not longer than 90 days. The discount will also amount to not more than 85% of the invoice value.
Typical Invoice Discounting Transaction Structure
Company A (large firm) provides ongoing delivery of goods or services from its vendor Company B (SME).
Company A receives goods / services from Company B.
Company B issues invoice payable in 30 days.
NamPro Fund verifies debt with Company A.
NamPro Fund pays Company B 85% of the invoice.
NamPro Fund collects the amount of the invoice from Company A on due date.
NamPro Fund liquidates the invoice in advance and remits the balance to Company B.
FINANCE LEASE FACILITY
The Finance Lease facility grants loans to an SME to purchase assets. The SME provides at least 10% of the purchase price, while the Fund finances the balance. The SME becomes the owner of the asset, but the rights are only signed over after full repayment of the facility. Repayment is done in equal instalments.
If you have been awarded a contract that requires you to buy plant and machinery to fulfil your responsibilities over an extended period, this product will relieve the stress of having to figure out how to purchase the equipment necessary for the successful completion of your project.
Target Clients
SMEs that have been awarded a contract that requires them to acquire plant and machinery to execute the contract over an extended period of no less than 18 months.
Product Features
Funding used to purchase the asset (plant and equipment).
Funding will be a maximum of 90% of the value, plant and equipment.
SME to provide 10% deposit of purchase value.
Ownership of asset is with SME, but lien registered in favour of the Fund.
Maintenance and risks rest with SME.
Repayment is done in equal instalments.
BID BONDS
Our Bid Bonds are pledges that are given by the Fund on behalf of the SME. These help SME contractors qualify to bid for tenders that require bid bonds as part of their qualifying criteria.
If you would like to tender for specific contracts to construct/develop infrastructure or supply goods and you need a bid bond to qualify for the tender, look no further. Our Bid Bonds are designed to cater for SMEs who have such needs.
Target Clients
SMEs that want to tender for specific contracts to construct/develop infrastructure or supply goods.
Product Features
Bid bonds to enable SME supplier contractors to qualify to tender for bids requiring posting of bid bonds/guarantees.
Product can take the form of an insurance-issued or bank-issued guarantee arranged by the Fund.
Typical Bid Bond Transaction Structure
Large firm (Company A) issues invitation for bids with pre-tender bid bond as a requirement.
Company B, who wishes to respond to the bid, applies to NamPro Fund for a Bid Bond.
NamPro Fund appraises tender, client performance and based on risk assessment, issues a bid bond (against some security).
Bid bond is provided on the condition that Company B utilises other NamPro Fund products.
If Company B is successful, it applies for other products. If not, the bid bond is released back to NamPro Fund.
PURCHASE ORDER
NamPro Fund’s Purchase Order Finance facility is a product designed to give clients the funding they need to purchase, insure and transport finished goods for delivery to their buyers.
If you have been awarded a contract to supply goods to a large off-taker, apply for our Purchase Order Finance facility, which will help you finance purchases, insurance and transportation of goods to your clients.
Target Clients
SMEs that have been awarded contracts to supply goods to approved buyers (off-takers). No value add is required.
Product Features
Funding will be used to finance purchases, insurance and transportation of goods for delivery to an off-taker, with payment received on delivery or on agreed credit terms following delivery.
The facility will not exceed 60 days and will be for no more than 75% of the supply contract/order value.
Typical Purchase Order Finance Transaction Structure
Large firm (Company A) awards contract to SME entity (Company B) to supply specified goods, for example, computers.
Company B applies for credit from NamPro Fund.
NamPro Fund reviews the credit application and on approval, obtains Company A’s commitment to pay all proceeds to the Fund’s account upon delivery of goods.
NamPro Fund opens a Letter of Credit to import goods as per specifications or transfers cash to goods supplier.
The goods are delivered directly to Company A, which signs for receipt of goods and process payment to NamPro Fund.
The Fund deducts amounts due to it and pays net proceeds to Company B.
MEDIUM-TERM FINANCE FACILITY
The Medium-term Finance Facility is a product that provides funding to cover costs to purchase raw materials and pay salaries and sub-contractors for contracts that are for more than 12 months.
If you need funding to cover input costs for value addition assignments, such as construction of clinics, maintenance or manufacturing for periods between 12 – 36 months, this facility was designed especially for you. It will provide you with finance that will ease the burden of funding that may hamper the progress of your project.
Target Clients
SMEs that have been awarded contracts to deliver a value addition assignment, such as a construction or maintenance contract, with the project running for periods between 12 – 48 months.
Product Features
Funding is to be used to cover input costs, such as purchasing raw materials, labour and paying sub-contractors.
Funding will be provided in stages, depending on preceding stage being completed, and invoiced for.
Typical Value-added Supply Services Contract Financial Transaction.
Large firm (Company A) awards contract to SME entity (Company B) to construct new factory building.
Company B applies for Medium-term Financing facility from NamPro Fund to finance the purchase of building materials and provide cash advances to pay sub-contractors.
NamPro Fund reviews the credit application and on approval, obtains Company A’s commitment to pay all contract proceeds to the Fund.
NamPro Fund pays building material suppliers and sub-contractors directly.
The SME construction company commences building and submits progress payment certified invoices to Company A.
Company A then pays the proceeds directly into the Fund’s account. The Fund deducts amounts due and thereafter releases net proceeds to Company B.
FINANCE LEASES
Our Operating Lease facility is a product designed to make assets available to you for use during your contract. We acquire the asset on your behalf and lease it out to you at an agreed monthly charge.
Have you been awarded a big contract that requires buying machinery, but you do not have the finance for the purchase? Our Operating Lease facility will enable you to get the equipment you need.
Target Clients
SMEs that have been awarded a contract that requires the acquisition of plant and machinery to execute the contract over an extended period of less than 18 months.
Product Features
Funding is used to purchase assets.
Ownership remains with the Fund and the SME has lease rights at monthly rental charges.
Maintenance and risk are for the Fund’s account.
The period of lease is less than the economic life of the asset.
The asset can be leased out to another SME after expiry of initial lease contract.
Typical Operating Lease Transaction
Large firm (Company A) awards contract to medium size entity (Company B) to render services requiring the availability of plant.
Company B applies for the Operating Lease Finance facility from NamPro Fund. The Fund reviews the application and presents a profit sharing formula to Company B.
On approval, Company B obtains Company A’s commitment to pay all proceeds to NamPro Fund.
Company A pays the Fund the contract value due to Company B and then deducts amounts due to the Fund under an agreed profit sharing arrangement.
The Fund thereafter pays over to Company B the remaining net proceeds.
