Men­tor­ing for growth

CityPress - - Voices -

Are you a black en­tre­pre­neur want­ing to start a new busi­ness? Or would you like to grow your ex­ist­ing busi­ness? If the an­swer to these ques­tions is yes, then the Na­tional Em­pow­er­ment Fund (NEF) is ready to help you. Es­tab­lished by the NEF Act of 1998, the fund’s man­date is to drive and pro­mote black eco­nomic em­pow­er­ment through fi­nan­cial and non­fi­nan­cial sup­port.

The NEF funds projects from R250 000 to R75 mil­lion for black en­trepreneurs, but more than that it also pro­vides non­fi­nan­cial sup­port to prospec­tive and ac­tive black en­trepreneurs be­cause of the need to meet chal­lenges such as lim­ited busi­ness man­age­ment skills, in­clud­ing fi­nan­cial, mar­ket­ing and tech­ni­cal ex­per­tise, as well as poor qual­ity busi­ness plans. Glob­ally, 30% of start-ups fail in the first two years, while less than 50% sur­vive be­yond four years.

In re­sponse to these con­straints the fund’s online busi­ness plan tool, launched in 2009, is avail­able for free to the public on the NEF’s web­site. The tool is de­signed to as­sist ap­pli­cants in ini­ti­at­ing, im­prov­ing and re­fin­ing the qual­ity of their busi­ness plans, in­clud­ing the com­ple­tion of fi­nan­cial pro­jec­tions through an in­ter­ac­tive, step-by-step, ques­tio­nand-an­swer process.

Through its post-in­vest­ment busi­ness unit, the NEF mon­i­tors the per­for­mance of its grow­ing num­ber of in­vestees for risk and pro­vides on­go­ing busi­ness sup­port when re­quired, which in­cludes free men­tor­ship and busi­ness coach­ing to its ex­ist­ing clients. These busi­ness men­tors are de­ployed through­out the coun­try and pos­sess a wide spec­trum of busi­ness ex­per­tise.

“As a de­vel­op­ment fi­nance in­sti­tu­tion the NEF is pas­sion­ate about build­ing an eco­nom­i­cally em­pow­ered na­tion by driv­ing rad­i­cal eco­nomic trans­for­ma­tion through the pro­vi­sion of fi­nan­cial and non­fi­nan­cial busi­ness sup­port to black en­trepreneurs, as well as by grow­ing black in­dus­tri­al­ists across key sec­tors of the econ­omy,” says NEF chief ex­ec­u­tive Philisiwe Mthethwa.

Here’s what the NEF funds

On av­er­age, the NEF’s busi­ness loans are re­payable over four to seven years, and up to 10 years where marked with an as­ter­isk (*):

En­trepreneur­ship fi­nance for start­ing a new busi­ness: R250 000 to R10 mil­lion;

Pro­cure­ment fi­nance for ten­ders and con­tracts: R250 000 to R10 mil­lion;

Fran­chise fi­nance for preap­proved fran­chise li­cences: R250 000 to R10 mil­lion; Ac­qui­si­tion fi­nance for black in­vestors ac­quir­ing a stake in medium to large com­pa­nies: R2 mil­lion to R75 mil­lion;

Women em­pow­er­ment fund for own­er­ship, man­age­ment and con­trol across all eco­nomic sec­tors: R250 000 to R75 mil­lion;

Ex­pan­sion cap­i­tal for grow­ing an ex­ist­ing busi­ness: R250 000 to R75 mil­lion;

Project fi­nance par­tic­i­pa­tion in green­field projects: R5 mil­lion to R75 mil­lion*;

Cap­i­tal mar­kets list­ing on the JSE or its ju­nior AltX mar­kets: R2 mil­lion to R75 mil­lion;

Liq­uid­ity and ware­hous­ing – the NEF has black fa­cil­i­ta­tor sta­tus, which can help black share­hold­ers and com­pa­nies wish­ing to sell a stake while keep­ing the share­hold­ing black: R2 mil­lion to R75 mil­lion;

Ru­ral and com­mu­nity de­vel­op­ment fund for agripro­cess­ing, tourism, min­ing and ben­e­fi­ci­a­tion, man­u­fac­tur­ing: R1 mil­lion to R50 mil­lion*; and

Strate­gic projects fund and ven­ture cap­i­tal fund, in­vest­ing in early-stage projects for the pur­pose of de­vel­op­ing strate­gic in­dus­trial ca­pac­ity in poverty nodes, re­new­able en­ergy, busi­ness process out­sourc­ing, tourism, man­u­fac­tur­ing, min­ing and min­eral ben­e­fi­ci­a­tion: R1 mil­lion to R75 mil­lion*.

NEF funding cri­te­ria

Ap­pli­ca­tions are as­sessed in terms of the fol­low­ing cri­te­ria:

Com­mer­cial vi­a­bil­ity of the busi­ness case be­ing pre­sented; The busi­ness must com­ply with all rel­e­vant laws and reg­u­la­tions;

There must be op­er­a­tional in­volve­ment by black peo­ple at man­age­rial and board level;

Min­i­mum per­cent­age of black own­er­ship or in­ter­est of 50.1% is a re­quire­ment ex­cept for strate­gic projects, ru­ral and com­mu­nity de­vel­op­ment as well as eq­uity ac­qui­si­tion trans­ac­tions; Mean­ing­ful black women par­tic­i­pa­tion is crit­i­cal; The busi­ness must be able to re­pay NEF funding; The busi­ness must cre­ate a rea­son­able num­ber of jobs;

Geo­graphic lo­ca­tion of the busi­ness is im­por­tant with the fo­cus on ru­ral or eco­nom­i­cally de­pressed ar­eas;

Ru­ral and com­mu­nity de­vel­op­ment projects must have mean­ing­ful par­tic­i­pa­tion by com­mu­ni­ties; and

Pos­si­bil­ity of co-funding with pri­vate or public sec­tor in­sti­tu­tions is en­cour­aged in larger projects. This project is re­ported by City Press and sup­ported by the NEF

PHOTO: COMBERERO

Thanks to the dy­namic women at Comberero, wet ce­ment can now be pumped where it’s needed

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