Business Loans in Kenya Without Collateral

If you have been searching for a business loan in Kenya without collateral, you have probably found two kinds of answer. Banks and SACCOs that ask for a title deed, a logbook or a guarantor, all of which take time to assemble. And mobile lending apps that ask for nothing at all — and price the money accordingly, with fees that are difficult to see until the statement arrives.

There is a third route, and it is the one we operate. DGC Finance does not ask you to pledge land or a vehicle. We ask two things instead: that you already hold part of what the project costs, and that the business — or the plan, if you are not trading yet — can be evidenced. We then fund the difference, up to 80% of the project cost, at a flat rate of 4%, repayable over a term of up to 36 months.

Why lenders ask for collateral, and what replaces it

Collateral is not the point of a loan; it is a substitute for confidence. A lender who cannot see how you will repay asks for something it can sell if you do not. Remove the title deed and the same question remains: what makes repayment likely?

For a business that is already trading, the answer is usually cash flow. Sales records, supplier invoices, a business bank account or a mobile money till give a lender a basis for estimating what the business can service each month. Inventory and equipment serve a similar purpose: they are not land, but they are real, and they are tied to the activity the money is funding. Your own contribution does the same work from the other direction — it demonstrates that the business, not the lender, is carrying part of the risk.

How the 20/80 deficit model works

We do not fund the whole of a project. We fund the deficit — the gap between what the project costs and what you have already put aside for it.

• You tell us the total cost of the project and the amount you already hold toward it.
• You set out in writing how the funds will be used, and how the project affects the business.
• We advance the shortfall, up to 80% of the cost, at a flat 4% rate.
• You repay over a term of your choosing, up to 36 months.

Worked example: a KES 500,000 project

KES 500,000 project at 4% flat over 36 months

Component	Amount
Total project cost	KES 500,000
Your contribution, 20%	KES 100,000
Facility advanced, 80%	KES 400,000
Interest at 4% flat	KES 16,000
Total repayable	KES 416,000
Monthly instalment, 36 months	KES 11,555.56

Interest is applied to the amount advanced, not to the whole project, which is one of the reasons the figure stays small. A larger project works the same way: at KES 1,000,000, a 20% contribution of KES 200,000 leaves a facility of KES 800,000, interest of KES 32,000, and a monthly instalment of approximately KES 23,111 over 36 months.

Who qualifies

We finance two kinds of applicant, and both need the same thing: part of the money already in place.

• A business already trading. Registration in place, sales being generated, and ordinary documentation of a going concern.
• An individual or a new venture not yet trading. Part of the required capital committed, and a written direction that can be verified rather than merely described.

Sector makes no difference to that test, and neither does the absence of a registered company. A sole trader with a stall and a record of takings is assessed on the same footing as a limited company, as set out in business loans for individuals in Kenya. Season-led agribusiness and women-led enterprises likewise, with the particular considerations for those two groups in agribusiness and women-led business financing in Kenya.

We do not lend where there is no contribution and no evidence, because that is not a gap — it is the whole project, and it belongs to a different kind of financier. Being clear about that is the reason we can offer a rate that banks do not.

What it costs

The facility carries a flat rate of 4%, agreed in writing before you sign and fixed for the term. There is no charge to apply, and no equity, board seat or share of profit is taken at any point — this is a loan, and at settlement the relationship ends.

Any other amount that applies to your particular file is set out in the facility agreement before signature, not afterwards.

What you need to start

• A business, or a venture you can describe. A registration certificate is enough for the first. For the second, a short written outline of what you will sell, and to whom.
• Proof that you hold your share. A bank or mobile-money balance, a statement, or a receipt — anything that confirms the money is genuinely in hand.
• A note on what the money buys. A quotation or invoice where you have one. Where you do not, a sentence on the purchase is read the same way.

That is the whole list. Nothing further is needed until a loan officer has read your file; anything else is requested by them, in writing, and only from the applications being taken forward.

Frequently asked questions

Next step

If you have part of the money and a project that can be described clearly, the conversation is short. Tell us the project cost and your contribution; we will tell you what the fund can provide, what the monthly instalment would be, and what documentation the loan officer will need. If you are weighing an online application against a mobile lending app, that comparison is set out in online and startup business loans in Kenya.

Terms are set out in full on the legal page, and the structure of the fund is explained on the about page.