The Dutch development bank FMO has closed a R100m ($8.39m) 4-year senior LCY loan with Rand Trust Financiers (RTF), a specialist debtor finance and debtor administration business with a 100% focus on SME’s in South Africa.

RTF is part of the Transaction Capital Group, who is also the main shareholder in one of our other longstanding clients in South Africa, SA Taxi.

RTF takes over and collects the full debtor books of its clients and finances/discounts the eligible quality debtor invoices.

The full book of discounted and non-discounted invoices serves as collateral for RTF.

“Thanks to the highly collateralized nature of the business and very close follow-up on and monitoring of clients, RTF is able to finance companies which do not generally have access to regular banks,” FMO said in a statement.

“The transaction with RTF hence leads to access to finance for these SME’s, making it an excellent match with the purpose of the MASSIF fund from which the transaction is financed.”

Established in 1958, Rand Trust is one of the oldest organisations of its kind in South Africa.

Rand Trust Financiers specializes in helping business improve cash flow and maximize working capital, by providing tailor-made working capital funding solutions to SME’s against assets that commercial banks do not fully value.

The development finance institution said that its loan enables RTF to pursue its ambitious growth strategy, being ensured of a more diversified and stable funder base.

“Next to our role of financier, we are also engaging with RTF to provide Capacity Development from MASSIF in the field of product innovation and/or risk management, which will further enhance our value proposition to the company,” FMO said.