11 Oct IDC announces quick, short-term finance
Industrial Development Corporation (IDC) has recently launched a new ring-fenced short-term finance product, FasTrak. FasTrak is a once-off, non-revolving credit/loan facility, applicable only to clients who have won contracts, tenders and/or orders and have an urgent need for bridging assistance for a limited time frame. The product seeks to close the gap by promising delivery of the funding and/or guarantees, within 14 days, provided all the information required is at the disposal of IDC’s International Finance Department.
“Businesses who require bridging finance need it quickly, normally within 14 to 21-days from the time that the contract or order is awarded,” says senior account manager Achmat Adams.
“The users of these products are mostly strong, but smaller businesses with limited cash flow. The IDC’s FasTrak aims to alleviate financial strains on these businesses that don’t have funds to satisfy their orders, which may result in the business either losing the order or using unconventional ways of funding, if not assisted. FasTrak is just one of the various examples of the IDC identifying a need, and satisfying it through an innovative product,” he adds.
IDC’s International Finance Department, with together with certain strategic business units, conducted a historical audit into the actual use of both the revolving credit and guarantee products. From this it was evident that the short-term finance products play a pivotal role in ensuring that the IDC fulfils its mandate of addressing market failures and assisting the economy to develop in ways that contribute to achieving the corporation’s development objectives.
He says: “As time is of the essence for this specific facility, the IDC’s process will be prompt, without taking unnecessary risk. An abridged due diligence will be conducted, based on a set number of documents that the applicant is expected to provide. A pro-forma application pack will be presented to the client, including all documents to be signed.”.
The facility will be capped at a maximum combined value of R5 million. Once an applicant is granted the assistance they require, they will not be able to access the facility again but can convert it to a revolving credit facility upon IDC conducting its normal due diligence process. The facility will operate on the same principles as a revolving short-term finance/guarantee product in all other respects, which is available for up to six months pre- and six months post-shipment financing.