The funding period typically ranges between 4 to 5 years and for short term funding it can go as low as 3 months. The transaction sizes range are as follows:
-
Black women owned (51%) businesses -from R30,000 up to R5 million
-
White women owned (51%) businesses - from R30,000 up to R2 million
Businesses are funded n the following stages of development:
-
At least 6 months operational track record
-
Growth and Expansion
-
Outright or 51% acquisition of a business
-
Bridging finance (http://www.idf.co.za)
National Empowerment Fund
From inception to date, 21% of the National Empowerment Fund's (NEF) funded portfolio has comprised businesses that are owned and managed by black women. Through its marketing and outreach initiatives, the NEF continues to urge more women to apply for funding. In the experience of the NEF, women entrepreneurs are known to have better financial discipline and tend to service their loans with far greater diligence and are reputed to do so in record time.
Funding Criteria
The NEF provides funds to black entrepreneurs and groups with the aim of facilitating access to finance in support of Broad-Based BEE in terms of government legislation. The investment activities of the NEF are guided by an investment policy that seeks to ensure that investments create real economic empowerment for black people without deviating from sound economic principles.
iMbewu Fund
This Fund is designed to support black entrepreneurs wishing to start new businesses as well 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 a minimum of R250 000 to a maximum of R10 million.
uMnotho Fund
This Fund is designed to improve access to BEE capital and has five products: Acquisition Finance, Project Finance, Expansion Finance, Capital Markets Fund, and Liquidity and Warehousing. These products provide capital to black-owned and managed enterprises, black entrepreneurs who are buying equity shares in established black and white owned enterprises, starting new ventures, expanding existing businesses and BEE businesses that are or wish to be listed on the JSE.
Funding ranges from R2 million to R50 million.
Rural and Community Development Fund
Designed to promote sustainable change in social and economic relations and supporting the goals of growth and development in the rural economy, through financing of sustainable enterprises. This would be achieved through the mobilisation of rural communities in legal entities or cooperatives, in order to participate in the broader economic activities and realise the economic transformation goals in rural South Africa. The fund has three products: Acquisition Finance, Expansion Capital and Project Finance (New Venture/Start-up/Greenfields) with the funding threshold ranging from a minimum of R1 million to R50 million. Sectors to be funded:
-
Agro Processing and Manufacturing
-
Eco-Tourism
-
Forestry and Fisheries
-
Commercial Property
-
Aqua and Marine Culture
-
Non - Farm Activities (rural based)
Strategic Projects Fund
A unit of the NEF established with a mandate to increase the participation of black people in early-stage projects that are:
-
Aligned to national Government policy.
-
Seeks competitive opportunity for the South African economy and the inclusion of black participation in opportunities at the outset of projects, as opposed to doing so during equity closure.
Non-Financial Business Support
Pre-Investment Unit (PIU)
The NEF assists with funding advice, business planning and general assistance to help ensure that applications are of sufficient quality to complete all steps in the application process. (
www.nefcorp.co.za)
WDB Fund
A total of R20 million has been committed to WDB Microfinance for investment in small, women-owned, self-employment businesses in KwaZulu-Natal.
The aim of the fund with WDB is to assist women to be self-employed and to improve the livelihood of South African women.
Old Mutual will provide the beneficiaries with free financial education, while WDB would provide training on how to run a business, business support and mentorship, and encourage them to open savings accounts.
The target market for the fund is households with earnings below the poverty line in Northern Zululand (KwaZulu-Natal).
Eligibility for funding:
-
Self employed groups of five.
-
100% women owned.
-
Start-ups and existing groups needing refinancing.
-
Households living below the poverty line.
-
Focus area is KwaZulu-Natal.
No loans will be provided to fixed property arrangements and/or ventures that are (in the view of the fund managers) socially undesirable or irresponsible such as business with primary interests in tobacco, gambling, the sex industry and gaming.