Apr 41 min read

EVIDENCE TO SUPPORT AN ENTERPRISE DEVELOPMENT LOAN

An Enterprise Development loan is a formal loan, not a disguised grant, and must be accurately recorded in an organization’s financial statements. For B-BBEE (Broad-Based Black Economic Empowerment) verification, specific documentation is required, including a signed loan agreement, proof of the beneficiary's B-BBEE status, evidence of full repayment, a loan account presentation, and acknowledgment of receipt from the beneficiary.

The most critical element of an Enterprise Development loan is that it is a loan and not a grant disguised as one. An organisation must record a loan in their Financial Statements to confirm its origin. The following is a non-exhaustive list of evidence necessary for a B-BBEE Rating Agency at the time of a B-BBEE Verification:

Signed Loan Agreement including the type of loan and the terms of repayment;
Proof of the valid B-BBEE status of the Beneficiary;
Evidence that an organisation paid the loan in full as per the agreement;
Presentation of the loan account, ledger or a journal that determines the outstanding amount.
Acknowledgement from the Beneficiary that the loan was received as per the agreement;

As the necessary evidence slightly differs between B-BBEE Rating Agencies, an organisation should confirm before their B-BBEE Verification what their evidence requirements are.

Enterprise & Supplier Development Services are available to assist Members with the creation & implementation of Enterprise & Supplier Development initiatives.