BUSINESS owners in South Africa often struggle to obtain finance and many mistakenly believe the banks are the only place from which to get a loan, but there are many other organisations and institutions that are willing to assist with building your business.
BusinessOwner compiled this comprehensive list consisting of among others contact numbers, reach, performance and loan size of various institutions that assist businesses:
Banks
Absa: The best bet for a business that want to access a bank loan. They disperse more Khula Guarantees than any of the other banks in South Africa. Contact: 0800 41 41 41. www.absa.co.za
Standard Bank: The have various innovative products, like revolving credit and a transaction account which allows previously black-listed business owners to get a bank account. Contact: 0860 123 000 www.standardbank.co.za
Nedbank: They offer various product including plant and machinery finance and term finance, with an average loan size of R50 000 to R2 million. They view each proposal on its merit, but look strongly at cash flow projections for upcoming 12 months for start-ups or audited figures for the past two years for existing businesses. Contact: 0860 115 060 www.nedbank.co.za
First National Bank: One of the four major banks who give out Khula Guarantees. However in recent times they have been lagging behind in the number of Guarantees they've dispersed. Contact: 0860 103 224 www.fnb.co.za
Bankfin: Absa's vehicle and asset finance division.Contact: 0860 669 669. www.bankfin.co.za
Stannic:Standard Banks vehicle and asset finance division.Contact: 0860 000 000 www.stannic.co.za
Wesbank:First National Bank's divison for vehicle and asset finance. Contact: 0861 137 137 www.wesbank.co.za
National finance organisations
Khula Finance: Khula does not lend directly to business owners, but through the banks and Retail Finance Intemediataries (RFIs). Business owners who don't have sufficient enough collateral to secure a bank loan, can take out a Khula Credit Guarantee. Khula also finance businesses through equity and a land reform credit facility. (012) 394 5560 or 0800 11 881. www.khula.org.za
Sizanani: Set up by the Banking Council of South Africa and four banks to help businesses access loans of under R100 000 from banks. The organisation provides mentorship in the form of assisting with writing a business plan, to the prospective business looking for a loan. 0861 333 000.
Absa Black Business Incubator Funding Programme:
Spread: National
Loan products: Equity finance
Loan size: R300 000 to R10 million
Specific industry focus: None Requirements:
Companies of R5 million turnover and below must be 100% represented by black management and those with R% - R50 million must have a 51% representation of black management.
Contact: 0800 41 41 41 www.absa.co.za
Anglo Khula Mining Fund:
Spread: National
Loan products: Equity finance
Loan size: R5 million
Specific industry focus: Black empowerment junior mining and related industries to fund the pre-feasibility stage of the mine, environmental reports and the application for permits and licences.
Requirements: A detailed application procedure which includes a due technical and financial diligence, can be viewed on the website.
Performance: In 2003 the R40 million fund pledged to assist eight junior mining companies by 2005 over a 10 year period. Contact: (011) 638 4172. www.zimele.co.za
Business Partners:
Spread: National
Loan products: Equity, property and bridging finance.
Loan size: R250 000 to R15 million.
Specific industry focus: None, but includes franchising in partnership with the Umsobumvu Youth Fund. Requirements: Business Partners carries out assessment of business.
Performance: For the 2002/2003 year 496 investments valued collectively at R400 million, were carried out.
Contact: (011) 480 8700. www.businesspartners.co.za
FNB Progress Fund:
Reach: National
Loan products: Equity and debt.
Loan size: R100 000 to R5 million
Specific industry focus: Business owners who have secured lengthy contracts with the private sector or government. (careful, contractors have a building industry connotation)Requirements: Aims to invest between in viable black youth-empowered companies (owners between the ages of 18-35) who have secured significant medium to long term contracts with government.
Performance: Since launching in March 2003 the fund had handed out 12 loans to the total of R10,7 million by May 2004.
Contact: (011) 371 5579. www.progressfund.co.za
Industrial Devlopment Corporation (IDC):
Spread: National
Loan products: Equity, bridging finance and term loans.
Loan size: From R500 000 upwards.
Specific industry focus: Has 12 business units specializing in sectors which include chemicals, agri-business, tourism and retail as well as the wood and paper.
Requirements: Loans are usually granted to sizeable projects which will yield exceptable profits. Bridging finance is not aimed at construction.
Performance: Currently the IDC is assisting about 3 200 small and medium business.
Contact: 011-269 3000. www.idc.co.za
Khethani Business Finance:
Spread: Within the Metropoles of Cape Town, Durban and Johannesburg.
Loan products: Working Capital and bridging finance. Loan size: Up to R200 000.
Specific industry focus: None
Requirements: Must be operational for at least one year and must be able to cover 30% of loan with own collateral.
Performance: The Gauteng office, has so far granted 316 loans since its inception in 1998.
Contact: (011) 781 7224.
National Empowerment Fund:
Spread: National
Loan Products: Straight loan or equity finance.
Loan size: R250 000 to R10 million.
Specific industry focus: None, but does not finance property development and start-up mining.
Requirements: Aimed at black business owner looking to expand their business, start-up a new firm or buy into an existing company.
Performance: Poor. The fund was launched in 2001. After being largely dormant and struggling with internal problems, it relaunched in May 2004.
Contact: (011)731 9000 www.nefcorp.co.za
New Business Finance:
Reach: Cape Metropole and Gauteng.
Loan products: Working Capital, bridging finance and micro loans.
Loan size: R1 000 to R250 000.
Specific industry focus: None.
Requirements: None, other than a solid business plan and cash flow projection.
Performance: Dispersed some R30 million in loans since their inception in 1998.
Contact: (021) 671 6263.
Eastern Cape:
BFPA (Business Finance Promotion Agency):
Reach: Nelson Mandela Metropole.Loan products: Working Capital and bridging finance.
Loan size: R6 000 to R150 000.
Specific industry focus: None.
Requirements: Operational for at least one year and you must be able to cover 20% loan.
Performance: Handed out 47 loans in the 2002/2003 year at an average size of just under R38 000. Contact: (041) 487 0190.
Free State:
FDC (The Free State Development Corporation):
Spread: Free State.
Loan products: Working Capital, equity and bridging finance.
Loan size: R5 000 and no ceiling
Specific industry focus: Manufacturing, petro-chemical downstream, franchises and service industry. Requirements: Business owner must cover collateral of 65% and come with 10% of own contribution.
Performance: Have assisted more than 6 000 small businesses since 1995.Contact: (051) 400 0800. www.fdc.co.za
Gauteng:
Artpac Lending Services:
Reach: Gauteng.
Loan products: Provides small contractors with loans of between to assist them in buying materials needed for projects and for them to meet their overheads.
Loan size: R1 000 and R100 000.
Specific industry focus: Small contractors of construction.
Requirements: No specific one, but viability and experience of business owner is looked at.
Performance: In 2003 Artpac handed out 250 loans.
Contact: (011) 838 5137.
Basani Business Development Services:
Reach: Gauteng.
Loan products: Working capital and bridging finance.Loan size: R6 000 to R40 000.
Specific industry focus: None.
Requirements: Businesses have to be in operation for six months or longer.
Performance: In the 2001/2002 loan year Basani handed out 46 loans. But in 2002/2003 they experienced an increase of over 10% in loans handed out when the BusinessOwner spoke to the organisation.
Contact: (011) 333 3831.
Kwazulu-Natal:
Ithala Development Finance Corporation:
Reach: Kwazulu-Natal
Loan products: Working capital, bridging finance, building loans, plant and equipment finance, export finance and empowerment equity capital.
Loan size: Up to R5 million.
Specific industry focus: All except transport.
Requirements: None, but business owners do need to put down collateral, this varies.
Performance: In 2002 they granted 151 loans to business owners, with an average size of R87 000.
Contact: (031) 907 8911. www.ithala.co.za
Mpumalanga:
Mpumalanga Economic Empowerment Corporation (MEEC):
Reach: Mpumalanga
Loan products: Bridging finance, medium loans to assist with working capital and long term loans of up to 10 years.
Loan size: R10 000 to R10 million
Specific industry focus: Mining, manufacturing, agro-industries, tourism and service and retail.
Requirements: Collateral and various security agreements are decided with MEEC. Start-ups need at least 10% collateral.
Contact: (013) 933 3421. www.meec.co.za
Western Cape:
Casidra: Reach:
Western Cape rural and Metropole.
Loan products: Bridging finance, equity finance and co-operative finance.
Loan size: R10 000 to R160 000
Specific industry focus: None.
Requirements: Casidra doesn't require 100% security, but will take session on capital equipment purchased. Loans are not paid directly to the client, but rather to their supplier.
Performance: Casidra have already dispersed finance to 18 businesses granted in three months in 2004. Contact: (021) 021-8635000 www.casidra.co.za
Isibane Capital Partners:
Reach: Cape Metropole Loan products:
Bridging finance.
Loan size: R50 000 to R500 000.
Specific industry focus: Contractors with government contracts.
Requirements: Business plan and cash flow projection.
Performance: By March 2003 after running for a year they became an official Khula RFI. By then they had dispersed 15 loans totalling R2,8 million.
Contact: (021) 510 0382.