SME Order Finance

SME Order Finance is a credit product designed to support businesses with working capital to finance confirmed orders from reputable suppliers . The target group for this facility is Small and Medium Enterprises that are in the business of obtaining and executing orders or contracts . This product is ideal for businesses that have secured a confirmed order but need funding to purchase materials, cover production costs, or fulfill the contract requirements before receiving payment from their customer.

The primary purpose of SME Order Finance is to provide working capital to execute an order or contract . This means the funds are specifically intended to help your business fulfill a confirmed order by covering the costs associated with production, procurement of raw materials, or other expenses directly related to completing the contract. Once your customer pays for the order, the proceeds are used to repay the loan.

The facility amount ranges from a minimum of MWK200,000 to a maximum of MWK50,000,000 . The actual amount you qualify for depends on several factors, including the size of the order, your working capital requirements, and the security pledged. However, the loan amount cannot exceed the Bank's credit concentration limit .

SME Order Finance offers a minimum term of one month and a maximum term of six months . This short-term structure aligns with the typical order-to-payment cycle of most contracts. If there is a delay in receiving the proceeds from your customer, extensions may be considered . Interest is calculated on the reducing balance method, meaning you pay interest only on the outstanding loan amount.

The primary security for this facility is the assignment of proceeds from the contract to your NBS Bank account . This means you must direct your customer to pay the contract proceeds directly into your NBS account, and those funds are used to repay the loan. For loans up to MWK750,000, NBS Bank offers flexible collateral options. Acceptable collateral includes assignment of proceeds plus other forms of security such as cash, a motor vehicle, home equipment, or business equipment . For larger loans, you may also need to provide other acceptable tangible security such as real property .

To qualify for SME Order Finance, your business must meet several requirements . You must have executed similar contracts for at least 6 months, demonstrating experience in fulfilling the type of order you are seeking to finance. Your business must be actively banking with NBS Bank for at least 6 months. You must have a valid order or contract in writing that is duly signed by the company. You are required to assign the proceeds of the contract to your NBS Bank account and submit an Irrevocable Letter of Undertaking to have the proceeds remitted to your NBS Bank account. Additionally, you must submit cash flow projections as part of the application.