Financing your start-up business

There are a number of options available to you if you wish to start a business or to improve your business, but don’t have the finances. All of these options require you to be responsible and committed to your business if it is to succeed. Below are listed some possible avenues…



Banks

A number of banks offer business financing for start-ups. It is worth investigating this avenue of finance…

ABSA
Our business funding solutions cater for start-ups and existing small, medium and micro enterprises (SMEs) with working capital or expansion finance needs. Access any one of our Enterprise Development Centres around the country and get all the business development support that’s appropriate to your needs.

Nedbank
Start-up loan. Nedbank Small Business Services has the right solution for you. Whether your small business needs capital to finance: a business venture; an expansion of an existing business; or  vehicles, plant and machinery or property. We’ll find you an innovative way of meeting your needs without breaking the bank, ensuring you’re growing faster than you ever thought possible.

Government Grants and Funding

Incubation Support Programme
The Department of Trade and Industry (the dti) initiated the Incubation Support Programme (ISP) to develop incubators and create successful enterprises with the potential to revitalise communities and strengthen local and national economies.
In continuing to strengthen economic development through broadening participation in the economy, the ISP aims to ensure that small, micro and medium enterprises (SMMEs) graduate into the mainstream economy through the support provided by the incubators. The ISP is one of the support measures to encourage partnerships in which big business assists SMMEs with skills transfer, enterprise development, supplier development and marketing opportunities.

Industrial Development Corporation
The IDC offers funding across its mandated sectors under several Strategic Business Units. We enhance the industrial capability of South Africa and the rest of the continent by boosting economic growth and industrial development. We do this by funding entrepreneurs starting new enterprises or supporting companies that want to extend existing operations. But there are a number of other requirements that must also be met before funding can be unlocked. Click here to see these requirements.

Isivande Womens’ Fund (IWF)
Isivande Women’s Fund (IWF) is an exclusive fund that aims to accelerate women’s economic empowerment by providing more affordable, usable and responsive finance than is currently available. The IWF targets formally registered, 60% women-owned and/or managed enterprises that have been in existence and operating for two or more years with a loan range of R30 000 to R2 million.

National Empowerment Fund (NEF)
“Growing Black Economic Participation”. The NEF is, a part of the government’s development mandate to encourage black participation in business and entrepreneurship. It helps to assist black entrepreneurs in achieving funding. This fund aims to assist black youth, women and men, communities and businesses to achieve sustainable success.

National Youth Development Agency (NYDA)
The NYDA designs and implements programmes aimed at improving the lives and opportunities available to youth. These programmes could be clustered as follows:
At an individual level (Micro level), the NYDA provides direct services to youth in the form of information-provision, career guidance services, mentorship, skills development and training, entrepreneurial development and support, health awareness programmes and involvement in sport.
At a Community level (Meso Level), the NYDA encourages young people to be catalysts for change in their communities through involvement in community development activities, social cohesion activities, national youth service programmes and dialogues.
At a Provincial and National level (Macro Level), through its policy development, partnerships and research programmes, the NYDA facilitates the participation of youth in developing key policy inputs which shape the socio-economic landscape of South Africa.

Small Enterprise Finance Agency (SEFA)
sefa partners with the businesses it assists: creating partnerships is an important element of the sustainable development strategy. It enables the agency to provide the financial and business support that numerous small, medium, micro and co-operative enterprises throughout the country need, either to either establish new enterprises or to grow existing businesses. This way, sefa and its partners are contributing towards sustainable job creation. 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
  • Structured Finance Solutions (SFSs)

SMMEs and Co-operatives can get credit facilities from R500 up to R5-million when applying through any of sefa’s intermediaries or partnerships. For direct loans of R50 000 up to R5-million, SMMEs and Co-operatives can access this through the regional offices, sefa co-location offices and satellite offices nationally.

Crowd Funding initiatives

Jumpstarter
The crowdfunding portal that aims to link people who have good ideas, with people that like to see good ideas succeed!

Thundafund.com
Thundafund is South Africa’s leading online Crowdfunding Café and marketplace for creatives and innovators. Through Thundafund, entrepreneurs with their respective projects & ideas can raise capital and build a supportive crowd of backers through the process of crowdfunding. Designed for Africa by Africans. Our commitment is to South Africa and Africa and we believe that by activating our own communities we can build prosperity.

Agricultural initiatives

Agribee Linkages Fund
The Fund is a closed venture capital fund that jointly invests with strategic partners in selected startup AgriBEE farming operations. The Fund nurtures and invests in rural and peri-urban farms, focusing on dormant land reform farms and/or emerging farmers and/or aspirant black farmers that own or have access to unencumbered farm land. The aim is to assist these farmers to be technically competent and become commercially viable with market access, to ensure a meaningful contribution to the mainstream agricultural economy in line with the objectives of the AgriBEE charter. The aim is to ensure that incubatees graduate to operate businesses that are fully integrated into the commercial value chain production systems to produce safe, consistently high quality agricultural products .

Comprehensive Agricultural Support Programme (CASP)
The aim of this programme is to provide postsettlement support to the targeted beneficiaries of land reform and to other producers who have acquired land through private means and are, for example, engaged in value-adding enterprises domestically or involved in export.

Micro Agricultural Financial Institutions of South Africa (MAFISA)
MAFISA  provides financial services to smallholder producers in the agriculture, forestry and fisheries sector. The objective of the scheme is to address the financial services needs of smallholder producers in the  sector. Services provided through the scheme include production loans, facilitation of saving mobilization and capacity building for member owned financial institutions (intermediaries).

MAFISA products and services are accessed through a range of institutions accredited by the Department of Agriculture, Forestry and Fisheries (DAFF) to serve as retail intermediaries.

Other sources

Business Incubator
NexusSpace initiated our Small Business Incubation Fund to develop incubators and create successful enterprises with the potential to revitalise communities and strengthen local and national economies. In continuing to strengthen economic development through broadening participation in the economy, the Small Business Incubation Fund aims to ensure that small, micro and medium enterprises (SMMEs) graduate into the mainstream economy through the support provided by the incubators. The Small Business Incubation Fund is one of the support measures to encourage partnerships in which big business assists SMMEs with skills transfer, enterprise development, supplier development and marketing opportunities.

SASOL Enterprise and supplier development
The development of entrepreneurs is one of the most effective ways of stimulating economic growth, transformation and the creation of jobs in our communities. We recognise that a growing small, medium and micro-sized enterprise (SMME) sector is vital for broadening economic participation and delivering on our country’s economic development objectives.  Sasol’s Enterprise and Supplier Development function was established to ensure focused and integrated delivery of Sasol’s programmes aimed at contributing to the development of the SMME sector and the diversification of our supplier pool.  Our approach to enterprise and supplier development is to nurture, grow and sustain SMMEs by providing technical and business development support, through mentoring and coaching. In addition we provide loan funding to our qualifying SMME suppliers through the Sasol Siyakha Enterprise and Supplier Development Fund (“Sasol Siyakha Fund”).

Technology Innovation Agency – TIA
TIA will seek out and catalyse opportunities for investment funding where there exists: Creative new technology based ideas for either new or improved products, processes or services; or Existing technology based ideas for new or improved products, processes or services that can be further improved, developed and exploited by South Africans, whether directly or in collaboration with foreigners where a win-win partnership can be forged; or Development of infrastructure and capacity that will reduce the barriers to technological innovation in South Africa; and The stage of development of the idea is beyond basic research and before production expansion; and Where there are insufficient other resources available to progress the opportunity.

Youth Technology Innovation Fund
The Youth Technology Innovation Fund (YTIF) is aimed at promoting and stimulating the culture of technology innovation and entrepreneurship amongst the youth by providing access to financial and business support resources. This funding instrument is aimed at the youth between the ages of 18 and 30 who are not already funded through other TIA funding instruments.

And here is more information about financing your business…

Financing: Starting without money
Factsheet provided by the Small Enterprise Development Agency (SEDA) on how to start a business without any money.

Borrowing money from friends or family
Factsheet provided by the Small Enterprise Development Agency (SEDA) on staring a business with money borrowed from friends or family and the potential problems this can involve.