The National Credit Act itself is designed to promote an open credit market, according to NCR. Financing options that weren't available to small businesses in particular areas are now accessible, creating a bigger impact on the economy as a whole.Increasing popularity of business credit cards
Credit cards are among the financing options benefiting the most from the new Act. Business credit cards were not so common in South Africa, but more companies are now applying for one in anticipation of the Act. Business credit cards offer both higher credit limits and more business-centric facilities that will help small businesses take advantage of “always-ready financing” better.
There is a broad range of options to choose from too. The best small business credit cards
now offer little to no annual fee, lucrative reward programs, and financing of up to R200,000 – the equivalent of US $15,000 – for qualified businesses.
Small business credit cards are already very popular in the United States and Europe. The available cards are helping companies keep up with bills, pay their suppliers, and settle a lot of financial obligations in an instant, without having to worry about excessive fees and other costs. Compared to other short-term loans, business credit cards are also relatively affordable.Long-term secured loans for more
It used to be difficult to apply for long-term secured loans
using collateral in remote areas. Businesses based in certain cities had to make do with limited financing options hampering their growth. The market is evolving, but not all small business can take advantage of the evolution due to this particular barrier.
Once again, the National Credit Act
hopes to solve this particular issue for both personal and business users. There will be no more obstacles, and all assets will be valued objectively, allowing businesses in more parts of the country to access sufficient financing with long-term repayment terms. Educating the market
The sudden availability of more financing options is not without its risks. There are dangers of small businesses, especially new ones, misusing the loans available to them or mismanaging their companies. The situation could lead to serious problems, not just to the debtors, but also to the credit market in general.
As the regulating body of the credit industry, it is the NCR’s duty to also educate the market on the wise use of these new financing options. According to the official press release
, the NCR will also play a more active role in mitigating disputes between consumers and credit agencies or financial institutions.
All of these positive developments are good signs for the country’s economy. It won’t be long before we start seeing small businesses taking advantage of the new financing options available to them today.