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Frequently Asked Questions

Funding FAQ

NB: Due to financial constrains, the ECDC is currently not offering long term loans. The only available loan products on offer are the short term, Nexus Loan and Workflow Loan.  Job Stimulus Fund and Imvaba Cooperative Fund are also available incentives to businesses that are in compliance with the requirements. 


Short-term business financing solutions.

What does it do?

Its primary goal is to enhance cash flow to allow for efficient contract delivery, resulting in financial stability.  Effectively this is bridging finance.

How does it achieve this?

Through short-term, purpose-driven debt finance product packages.

What is a NEXUS trade loan?


You’ve been awarded a contract in the private or government sector that stands to take your business to a new level of prominence. Your cash holding may restrict the efficient delivery of your contract’s stated deliverables. You need a cash cushion to assist you in reaching this contract’s objective, so that you can sustain a healthy business …


The NEXUS trade loan serves the short-term finance needs of clients servicing contracts in the public and private sectors - placing them on the road to sustainable success.


Lifespan: 1 to 6 months

Interest: 2.5% per month

Size: R10,000 to R500,000

Fees and charges: Below R50,000 = R275 plus VAT; above R500,000 = R2,600 plus VAT

What is a WORKflow contractor loan?

You have been awarded a construction contract that could make or break your business.  You need to manage cashflow efficiently to deliver on the contract’s requirements.  You have the capacity, but you need a cashflow injection.


WORKflow contractor loans provide emerging contractors with both financial and technical support.  Made up out of two of the most important elements to a sustainable, successful business – work and cash flow, WORKflow is a product geared to the efficient flow of cash for clients servicing construction contracts in the public and private sectors.


Lifespan: 3 to 36 months

Interest: Prime -2% to Prime +5%

Size: R350,000 to R20,000,000

Fees and charges:  Structuring 1% of loan value cash management fee of 2.5% initiation fee in line with the National Credit Act

What is a POWERplus small loan?

You have a business idea – one that can work.  You are cash-strapped, and without money to spark your idea, it will die.  A small, short-term loan will assist you to initiate the beginning of a good thing.


Aimed at SMMEs, this short-term loan empowers them to reach their objectives by adding financial power.  POWERplus describes the value add that this competitively priced small loan offers businesses as they pursue financial entrenchment and sustainability.


Lifespan: 12 to 48 months

Interest: Linked to the prime rate Size: R50,000 to R500,000

Fees and charges: In line with the National Credit Act

What does long-term finance do?

It provides capital to businesses for sustained projects to facilitate the long-term viability of their operations, through funding organic growth.

What is a TERMcap loan?

A vehicle by which capital is channelled to a business to allow for financial viability and sustainability through term-defined debt financing.


‘TERMcap’ describes the product - a term loan that avails capital to the client.


Security: ECDC does not require 100% security cover, although available security is attached

Lifespan: 5-7 years (ECDC discretion on commercial property applications, may run to 12-year term)

Interest rates: Prime -2% to Prime +5%

Fees and charges: Structuring fee of between 1% and 3 % of value of transaction valuation fees where applicable; Bond registration fees where appropriate, at cost

Size: R500,000 to R20,000,000 per applicant (ECDC discretion applies)

What is EQUItrader equity finance?

EQUItrader provides for equity financing mainly for the manufacturing and retail sectors.


ECDC adopts an “equity warehousing’ policy” that aims to move equity off its balance sheet 5-7 years from the date of the transaction by selling its equity stake in a business to the existing shareholders. This process is geared to assist businesses to achieve their developmental objectives.


Equity warehousing is, therefore, the effective facilitation of equity deals (especially BEE buy-ins and buy-outs) through capital investment into businesses.


Lifespan: 5-7 years (ECDC discretion applies)

Fees and charges: Structuring fees of 1–3% of the total transaction value

Size: No specified minimum value; maximum investment of R10 million (ECDC discretion applies).

What should be included in the application?

Finance applications should include how the project facilitates job creation and/or retention, economic empowerment, value addition to the economy, rural/ township development, increased export income or a new greenfield initiative, where expansion and rehabilitation will be the resultant benefit.

What will ECDC not finance?

ECDC will not finance applications that propose the following circumstances:

  • Any development loans which might be offensive to the community directly affected by such development finance;

  • Any development loans which might be offensive to the community at large;

  • Development loans of which the nature thereof requires a period more than the recommended development finance period;

  • Any investment opportunity of which the main income stream is from a sub-contract, that is, not a primary contract;

  • An investment opportunity where there is no direct jobs created or saved as a result of the investment;

  • An investment opportunity which has the substance of being speculative;

  • Any residential property development;

  • Any investment opportunity where the main asset is vehicle finance

  • Any employee of ECDC and/ or any government employed officials whose conduct does not comply and prescribe to chapter 14: Code of Conduct & Business Ethics Policy as adopted by the ECDC

  • Any development loan required to fund the purchase of another development loan from the ECDC (ECDC does not lend money to a buyer to fund the purchase of a sale of its existing Development Loan). A deviation may be applied for should the economic value be present.


The application for finance is approved. What next?

Once the application has been approved, the process will start to determine the terms and conditions of the application. The suitability of the application does not guarantee that it will be successful. The contract will be considered binding once it is signed by ECDC and the applicant concerned.

Are quicker settlement plans encouraged?

As an entity concerned with sustainable development, ECDC welcomes settlement of the loan amount by the client before the end of the contract term.

What if I run into financial difficulty during the contract term?

A maximum six-month moratorium for final drawn down is allowed on all new development investments. A moratorium is only considered if cash flow of the promoter indicates that it is required.

What if my loan account falls into arrears?

If you default on monthly loan account repayments to the effect that the contract is more than three months in arrears, a full investigation as to why this is the case will be set in motion.


The account will be charged a 2% investigation fee, and in compliance with the National Credit Act, the relevant credit bodies will be informed of the default.

Got more questions, send us an email at


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Contact Us

Ocean Terrace Park
Moore Street, Quigney, East London, South Africa


Tel: +27 (0) 43 704 5601/46

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