Unreasonable East Africa Revolving Loan Fund(URLF)
For early-stage and growth-stage ventures using business to tackle social and environmental problems, the challenge of finding appropriate financing is a massive burden and needs more innovative models of financing to fix. Many early-stage ventures, including Unreasonable East Africa fellows, have locked in what works from a business standpoint, but still struggle to take their businesses to the next stage because of lack of access to more robust funding levels. They get stuck in what we call the “valley of death”, with angel financing on one side and Series A financing on the other.
The purpose of the URLF is to fill this financial gap in credit availability for Unreasonable East Africa’s entrepreneurs by providing them with easily accessible loans of between $5,000 and $50,000 with flexible payment terms. These loans will fund assets, operations, working capital or contracts that directly generate short-term revenue for the company thus increasing the venture’s revenue, impact and scale. The traction gained in settlement of these loans also builds the these entrepreneurs’ investment/credit profile with proof of financial discipline that helps solidify the case for future rounds of investment and fundraising. We strongly believe that we can’t afford to send the next generation of entrepreneurs into the world unprepared to tackle its greatest challenges. And these entrepreneurs won’t be prepared, no matter the size of their networks, no matter the mentorship they receive, if they don’t have the capital to breathe life into their ventures.
How the Fund Works
If interested in investing in this fund, or with further questions, please contact Ivan, our VP of Finance and Administration by clicking here. He would be ecstatic to talk to you more about this. If you’re considering adding capital to this fund, we can’t thank you enough for your willingness to give these entrepreneurs, who we believe are some of the most promising in the world, a chance to prove their solutions. You have our deepest and most unreasonable thanks.
This fund gives loans only to Unreasonable East Africa entrepreneurs that have successfully completed the Unreasonable East Africa Institute. If you are interested in receiving funds, see the details on eligibility and fund policies below, then…
- The applicant must have successfully completed participation in an Unreasonable East Africa Institute.
- The venture and the principal business activity which will be funded by the URLF financing must be located within the geographical focus of the Unreasonable East Africa Institute(currently Kenya, Tanzania, Uganda and South Sudan)
- The URLF is directed at only investments that directly increase the revenue of the company. Applicants should be certain about this and should be ready to prove this.
- The business activity to be undertaken with assistance from the URLF must result in scale of impact for the venture.
- Preference will be given to first time borrowers of the URLF. Borrowers may only have one loan out of the URLF at a time. Until the first loan is fully amortized, they are not eligible for another loan from the URLF.
- The existing or proposed business activity to be funded by the URLF must present a reasonable likelihood for long-term viability based on such factors as management, product, marketability, competition and capitalization. Borrowers must be of generally good character and credit standing.
URLF Loan Products
- Contract Finance Loan: This loan product is focused on providing companies with cash flow to be able to finance existing contracts that would increase the revenues and traction of the company. This loan is payable immediately the contract payment has been fulfilled by the contractor.
- Asset Finance Loan: This loan product is focused on supporting the company in the acquisition of critical assets that would increase her productivity thereby leading to the increase in revenue and traction for the company. This loan is payable over a period of 2 years.
- Inventory Finance Loan: This loan product is focused on providing companies with cash flow to be able to purchase inventory, in the cases when demand for their products outpaces their supply. This loan is payable for between 6-12 months.
General Lending Policies
Loan Size: US $5,000-$50,000
Loan Term: 6 months -2 years(depending on loan product)
Interest Rate: 15% p/a, Declining balance
Processing Fees and Insurance: 2%
Security Requirement: Determined on a case by case basis