Small Enterprise Finance Agency (SEFA)
Do you have an existing small business or want to start one? SEFA are piloting direct finance to entrepreneurs wanting to start or grow a business.
Types of SEFA Funding
SEFA provides direct funding to business in loans between R50 000 and R3 million in three different ways: Directly to business owners, via retail finance intermediaries, and through banks using credit guarantee schemes including Khula.
1. Bridging loans
- These are short-term loans, which provide working capital.
- The types of working capital offered by this government fund include stock purchases and operating overheads. This loan is offered for only one year.
2. Term loans
- This government fund is a loan of a specific amount and has a specified repayment schedule, amount and interest rate.
- This type of SEFA funding is normally used to finance your assets that have a medium to long-term lifespan, for example machinery, vehicles, office equipment.
- Term loans can be used to expand your business or for acquisitions.
- This loan has a repayment range of one to five years.
3. Structured finance
- Use this SEFA facility for funding that falls outside the parameters of the term and bridge loans.
- Provided by a debt facility, it can be repaid over a period of five years and tailored to your unique requirements.
- The following businesses can’t apply from the benefits of this fund: Liquor, tobacco, gambling, sex trade, armaments, speculative real estate, leveraged buy-out funds, and illegal trade.
- This includes any business activity that would tarnish SEFA’s reputation, political organisation, entrepreneurs under debt review, insolvent business owners and business.
How to Apply for SEFA Funding?
Your start-up and existing survivalist, micro, small and medium business must meet these criteria:
- Submit a completed application form
- Submit a completed comprehensive business plan that meet SEFA’s application requirements. Include initial and supporting documentation.
- Demonstrated ability to repay loans
- Personal and business credit references
- The applicant must be an owner manager
- The applicant must be a South African citizen with ID documents or a valid permanent residence. Alternatively, the business can be in the control of a South African citizen.
- The business must be legally constituted including sole traders with a fixed physical address
- Must have contractual capacity
- All operations including projects, programmes activities etc. must be within South Africa
- The enterprise must be compliant with accepted corporate governance practices
- A trust that has within the trust deed the power to borrow money and pledge assets as security and to give surety for borrowing.
Contact SEFA for funding
- Visit www.sefa.org.za for more information on regional branches, how to apply, exclusion criteria, products and services available. To contact head office, call 0860 00 73 32.
- To apply for Sefa Funding visit their website http://www.sefa.org.za/, you can either submit your application online or you can print it out and submit to their physical offices. You can see the contact information for both online and physical submissions for all their funds here.