Bridging finance in South Africa, explained straight

What bridging finance costs in South Africa

Bridging is the most expensive mainstream form of business credit because it is fast, short and often lightly secured. Market pricing runs at roughly 2%–5% per month — 24%–60% annualised — plus initiation and administration fees. Secured property bridges and confirmed-receivable bridges price at the bottom of the range; unsecured or higher-risk bridges at the top. Any provider unwilling to state the monthly rate and total cost of credit in writing should be excluded immediately.

When a bridge is the right structure

• Confirmed contract or purchase order — you have the order but not the working capital to deliver it.
• Invoice or receivable gaps — blue-chip debtors on 60–90 day terms while your creditors want 30.
• Property and transfer bridges — capital released against proceeds already in the conveyancing process.
• Pre-funding bridges — a defined interval before an approved facility, equity round or grant pays out.

The common thread: a certain, dated repayment event. If the repayment event is "trading improves," you do not need a bridge — you need a restructured balance sheet, and a bridge will make it worse at 4% a month.

Which companies offer bridging finance to SMEs

The market has three tiers: banks (cheapest, slowest, strictest security), specialist bridging and invoice-finance houses (days-fast, priced accordingly), and private credit funds for larger or structured situations. The right provider depends on your security, urgency and size — and frequently the right answer is a blended structure rather than a straight bridge, which is where Caban works: we structure the requirement, approach the appropriate lenders, and negotiate terms as your corporate finance advisor rather than as a lender selling one product.

What lenders will ask for

Expect to provide: the repayment event evidence (signed contract, sale agreement, approved facility letter), six to twelve months of bank statements, management accounts, debtor confirmation where relevant, and security — typically cession of the receivable, a bond over property, or personal suretyship. Preparation shortens approval from weeks to days.

Alternatives worth pricing first

Before signing a bridge, price the alternatives: invoice discounting facilities (revolving, cheaper at scale), purchase-order funding, asset finance against equipment, or accelerating the underlying long-term raise. Caban's funding routes desk maps every route — development finance included — before recommending the expensive one.