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outh Africa needs more entrepreneurs – especially those who start up, establish and grow small and medium enterprises (SMEs). Are you thinking of expanding or starting your business? The first thing on your mind will be how to raise the capital needed to fulfil your dream. Thankfully, in a bid to grow entrepreneurship in South Africa, a number of government and private funding platforms are available, each with their own mandate, qualification criteria and application process. Let’s take a look...
South African Investment Network This is an online platform that connects South African entrepreneurs seeking business funding with more than 156 000 ‘angel’ investors worldwide looking for investments. To get started, you need to register online to connect with investors, then create a pitch for your business. There is a handy triedand-tested template available on the website to assist you, as well as some great resources to help you along. Next step, publish your pitch. Once it is approved on the site, it will be listed for prospective investors to browse and evaluate. You can also have your pitch emailed to investors and send personalised messages to individuals. If an investor likes your pitch, you will receive an email asking to connect. You will then gain access to their contact details to continue discussions, schedule calls and meetings – and possibly secure that funding. You can accept funds from investors at any time – you do not have to reach any funding target and investors transfer to you directly, so there are no commission fees involved. For more information, visit: www.investmentnetwork.co.za.
Business Partners Limited Business Partners is an investment company for SMEs. The company invests between R250 000 and R15 million in SMEs across all sectors, except farming, on-lending and non-profit organisations. Investment financing is offered for businesses at all stages of development, including startups, expansions, outright purchases, management buy-outs, management buy-ins, franchises, tenders and contracts. The company also manages a number of specialist funds, which provide investment financing for defined-profile entrepreneurs. Business Partners also has a range of support services for entrepreneurs, including property management consultants, mentors who are allocated according to the company’s needs, and access to other expertise to ensure the success of a business. For more information, visit: www.businesspartners.co.za. 18
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The Small Enterprise Finance Agency (SEFA) SEFA provides financial products and services to qualifying small, medium and micro enterprises (SMMEs) and co-operatives, as defined in the National Small Business Act of 1996 and amended in 2004. It forges successful partnerships with clients, which contribute to great enterprises. The agency serves as a strategic financial partner to contribute significantly to the growth of the enterprise and so create lasting value. This means that SEFA is not the only channel to help SMMEs and co-operatives. They can also access SEFA’s products through any of its intermediary or partnership channels: commercial banks; co-operative financial institutions (CFIs); micro-finance intermediaries (MFIs); retail financial intermediaries (RFIs); strategic partnerships; and structured finance solutions (SFSes). SMMEs and co-operatives can get credit facilities from R500 up to R5 million when applying through any of SEFA’s intermediaries or partnerships. Direct loans between R50 000 and R5 million can be accessed through the regional offices, SEFA co-location offices and satellite offices nationally. Make sure you have a feasible business plan before you apply for the loan. SEFA staff will evaluate your application to determine the viability of your loan and at what rate it can be repaid. For more information, visit: www.sefa.org.za.
National Empowerment Fund (NEF) If you are directly involved in your business and need funding of between R250 000 and R75 million, the NEF may be able to assist you. It is mandated to offer financial and non-financial assistance to black-owned businesses. Funding decisions are guided by the Industrial Policy Action Plan (IPAP) across a variety of sectors. Startups can qualify for funding up to R10 million. The NEF also offers assistance for rural and community development, franchise finance and new industry development. NEF funding is currently obtainable from five funds, these are:
iMbewu Fund This fund is designed to support black entrepreneurs wishing to start new businesses, as well as to support existing black-owned enterprises with expansion capital. The fund supports these entities by offering debt, quasiequity and equity finance products, with the funding threshold ranging from R250 000 to R10 million.
