1. Purpose of the loan
1.1 This Loan is approved for the exclusive purpose of covering specified business expenses that support business operations and scaling, such as operational and capital expenses, as per the application submitted. Misuse of funds will result in penalties and a demand for immediate repayment.
1.2 Avo Vision or an appointed representative will facilitate the purchase of all equipment and machinery, and pay service providers, where possible. Ownership of equipment and machinery only transfers from Avo Vision to the MSME upon full repayment of the loan.
2. Interest-Free Loans
2.1 Loans are provided interest-free (0%) for a period of 24 months to green MSMEs incubated or supported by Avo Vision. Upon the lapse of the 24-month period, the Mora interest will be applied.
3. Loan Duration
3.1 This is a 24-month term loan. Loan period commences from the date of approval of the application.
4. Off-take Agreement
4.1 Access to loan funding is dependent upon signing of an off-take agreement with Avo for the sale of produced goods (e.g. firewood, charcoal). During the period of the loan the MSME commits to selling products through the Off-taker. Avo reverses the right to recover 6,5% for all sales facilitated through the off-taker.
5. Repayment Terms and Conditions
5.1 Payment Start Date: Repayments will commence on the 25th day of month 7 and continue until the 24-month period ceases. If the principal debt is not repaid within 24 months upon approval, interest will be charged on the remaining debt amount based on the Incidental Credit Agreement (mora interest).
5.2 Repayment Intervals: Repayments must be made in equal installments monthly.
5.3 Avo vision reserves the right to deduct loan installment upon payment of invoice for charcoal or other product sales to Avo. The balance of the invoice owed to the entrepreneur will be paid to the MSME.
5.4 Upon meeting of milestones, MSMEs may apply for further funding. A new 24-month period resumes upon approval of subsequent applications.
6. Late Payment Default and Recovery
6.1 Penalty Rate: failure to make payments as per arranged date will result in monthly penalties, as per the Incidental Credit Agreement.
6.2 Failure to honour payment for a period of 3 months or longer will result in collection of equipment by Avo.
6.3 Upon resumption of repayment period, Avo Vision will initiate legal proceedings to recover outstanding amounts should a period of 60 days of non-payment lapse.
7. Nedbank Transactional Account Requirement
7.1 Applicants must hold an active Nedbank transactional business account for the disbursement of funds and to facilitate direct debit repayments.
8. Incubation Requirement
8.1 Only green businesses currently incubated by or supported Avo Vision are eligible to apply, ensuring they receive structured support and access to essential resources to maximize loan effectiveness.
9. Financial Literacy and Business Skills Training
9.1 Avo Vision reserves the right to provide training in financial and business skills to support loan utilization and repayment. Costs will be borne by the MSME.
10. Additional Fees or Additional Charges
10.1 There are no fees, charges or interest associated applicable on condition of compliance with repayment terms agreed to.
11. Suretyship and Security
11.1 All shareholders/members/directors bind themselves in writing as sureties and co-principal debtors in solidum for the due performance of all obligations under this loan.
12. Monitoring and Reporting
12.1 Businesses must participate in weekly reporting and monthly evaluations, providing Avo Vision with performance and compliance updates as per prescribed templates and systems.
