SEFA
The Small Enterprise Finance Agency (SEFA) is a wholly owned subsidiary of the Industrial Development Corporation (IDC) that provides financial products (Business Loans) and services to qualifying SMMEs and co-operates. Unlike the IDC that focuses on providing funding only for businesses in the manufacturing and tourism sector, SEFA provides direct lending for a wider business sector including, services (including retail, wholesale and tourism); manufacturing (including agro-processing); agriculture (specifically land reform beneficiaries and contract-farming activities); construction (small construction contractors); mining (specifically small scale miners) and green industries (renewable energy, waste and recycling management).
SEFA aims to create strategic partnerships with a range of institutions for sustainable small, micro and co-operative enterprise development and support. This is not only to provide financial products to businesses and co-operates but to also to monitor the effectiveness and impact of their financing, credit guarantee and capacity development activities to promote growth and contribution of job creation.
SEFA provides financing through various distribution channels that can be accessible to anyone who is looking for funding for startups, businesses that are in their growth or expansion phase or to acquire an existing business. Your business needs to be viable and well planned in order for you to get access to funding through SEFA.
SEFA is able to provide the following financial products to any business that’s within the sector that they provide funding to.
Direct Lending
Direct lending provides businesses to have access to loans between R50, 000.00 – R5,000,000.00 through various methods depending on what they need the loans for.
Asset Finance
Long term loan meant to finance the purchase of moveable assets such as equipment, machinery or vehicles. The assets must be identifiable by a registration number or serial number.
Assets may be used as security by SEFA in case the borrower defaults.
This loan takes between 12 – 60 months to be repaid
Bridging loans
Short term loans meant to provide finance for working capital for businesses that need cash for overhead costs and to manufacture or supply stock. Bridging loans are easily accessibly if your business already has a purchase order or letter of intent to purchase goods/services from your enterprise.
May access between R50, 000.00 – R5, 000,000.00
Short term loans are paid back within a period of 12 months
To apply for a term loan the business will need to supply with the following documentation:
- Project plan and projects
- Copy of contract or purchase order (Letter of intent)
- Completion certificate for previous work done (for construction projects only)
- NHBRC and CIBD (for construction projects only)
- Bills of quantities (for construction projects only)
Revolving loans
Short term loan that the business can access on demand. This loan is mainly used to finance operation needs of the business. Revolving loans are mainly available to existing businesses that already have an account with SEFA.
This loan should be paid within 12 months
Term loans
Long term loans that gives a business access to cash for the acquisition of moveable assets that cannot be identified by a registration number or serial number e.g equipment or components of equipment
This loan takes between 12 – 60 months to be repaid.
To apply for a term loan the business will need to supply with the following documentation:
- Business plan
- Cash flow projections
- Lease agreement (If applicable)
- Franchise agreement (If applicable)
Amavulandlela funding scheme for entrepreneurs with physical disabilities
This loan scheme is dedicated to small and medium sized businesses of which 51% or more ownership is held by a person or people with disabilities. This is a scheme dedicated to provide funding for entrepreneurs who are living with a disability.
This scheme allows the entrepreneur to have access to special benefits such as a preferential fixed interest rate of 7% p.a and provides with business support, technical assistance to the applicant to name a few.
The normal repayment terms apply depending on which loan the applicant would be applying for.
Purchase order finance
Similar to the bridging finance, this loan provides finance to the business for the sole purpose of supplying a client with goods and services should there be a shortage in stock or if the business require extra funds in order to meet the demands they are facing.
Quick to access if the business already has a contractual obligation to supply another business with goods or services within a specified time period. Offers an advance of up to R1, 000,000.00 to fulfill the business orders.
Repayment will depend on the duration of the purchase order or contract terms.
All applications must consist with the below applicable documents:
- Application form
- Surety form (where applicable)
- Certified copy of ID and that of spouse (if married in community of property [ICOP])
- Marriage certificate (where applicable)
- Short CV of the members/directors/ shareholders/trustees/etc.
- Proof of residence: utility bill/sworn affidavit (not older than three months)
- Valid tax clearance certificate
- Company registration documents, such as a CK2 or company profile
- Proof of CIPC/CIPRO annual fees
- Six months latest bank statement (personal and business)
- Loan breakdown
- Supporting quotations (with contact person and banking details of supplier)
- Personal income and expenditure schedule, and statement of assets and liability
- Proof of own contribution and source (if applicable)
- Member’s resolution to apply (if applicable)
- If a judgment, notice or default is issued against the applicant, a letter or document to prove that arrangements are made to settle the account or proof that the account is settled must be provided
- Historic financial statements (not less than three years – if applicable)
- Up to date management accounts (if applicable)
- Debtors age analysis (if applicable)
- Creditors age analysis (if applicable)
