If you have a new or fledgling business or want to grow your business, you may be looking to get funding from SEFA. The Small Enterprise Finance Agency has been given a mandate from the government to assist small, medium, and survivalist businesses with funding.
Since launching in 2012, SEFA has been given access to R1.4 billion in funding by the government and the Industrial Development Corporation. For those businesses wanting to know how to apply for funding, this guide should help you initiate the process.
SEFAs Different Funding Products
SEFA isn’t similar to conventional funders and lenders. Since they have a government-issued mandate, businesses that apply for funding have to meet specific criteria that don’t only have to do with revenue and include non-conventional criteria. As a result, they have divided their services into different products, each with its purpose.
Township and Rural Entrepreneurship Programme (TREP)
TREP is designed for small, micro, and informal businesses that operate in the township. The purpose of the programme is to give applicants a mixture of finance and business development, assisting them with expansion to the mainstream economy. Businesses that would benefit from this programme include bakeries, spaza shops, small-scale clothing and textile businesses, tshinyamas and open-air food stalls, informal traders, and those in the automotive aftermarket industry.
Business Rescue Package
The business rescue package was launched to assist small businesses that were disrupted and vandalised during the looting that took place in Gauteng and Kwa-Zulu Natal in 2022. The purpose of the package is to offer support for uninsured small businesses affected by the looting, preserve jobs and rebuild their businesses.
Small Enterprise Manufacturing Support
The fund is aimed at rural areas, townships, and villages. Its purpose is to improve these economies by providing much-needed financial and business development support to revive the manufacturing industries in these areas. Businesses that would benefit from this fund would include:
- Furniture and coffin manufacturers
- Iron and steel products manufacturers and suppliers
- Paint, oil, disinfectants, water, sanitisers, recycling and related product manufacturers
- Manufacturers of food and beverage
This fund gives up to R15 million in funding per small business and can be repaid in 84 months (7 years).
Direct Lending Products
Through direct lending, SEFA can give existing businesses loans ranging from R50,000 to R15 million. However, the businesses must meet specific lending criteria and screening before gaining access to this product.
These loans may include bridging loans, revolving loans, and conventional term loans.
Wholesale Lending Products
To ensure more businesses have access to funding, SEFA also extends up to R150 million to various intermediaries. These intermediaries will then lend out up to R5 million to qualifying small businesses.
How To Apply for Funding With SEFA
Now that you’re aware that not all of SEFAs products are direct-lending or government-sponsored business grants, you can move on to initiating an application. The below 4-step process details how to apply for funding with SEFA online.
Step 1: Sign Up For An Account
To start the funding process, visit https://www.sefa.org.za. On the homepage, click on “Apply for Funding” at the top right corner of the screen.
You will be redirected to a disclaimer. This disclaimer details that you acknowledge that by completing the rest of the funding application, SEFA may suggest several funding products, including those of third parties. If you understand that disclaimer, you can continue.
You will then be required to create an account. You need to enter your first name and surname, your email address, your cell phone number, and a password.
Step 2: Confirm Your Email
After creating an account, SEFA will send you an email to confirm your email address. Check your spam or junk mail folder if the email is not in your inbox.
When you’re in the email, click on the link to confirm your email address. You will then be redirected to a confirmation page. Now, you can use your login credentials to sign in.
Step 3: Answer the SEFA Questionnaire
When you’ve signed in, you will have to fill in a questionnaire asking you questions about your business. These questions will include if you’ve received SEFA funding before in addition to what you need the funding for.
You will also need to provide your ID number or Passport number that must be linked to your CIPC registered business.
Step 4: Create an Application Based on the Recommendation
Once you’ve completed the questionnaire, SEFA should provide a list of recommendations. Each of these recommendations will have a set of qualifying criteria and supporting documents. Look into each option before deciding what’s best.
Then once you’ve made the decision, you can provide all your supporting documentation.
How Long Does it Take to Get Funding From SEFA?
How long your SEFA funding takes will depend on the type of funding you apply to receive. For example, a bridging loan – where you have a purchase order but require funding to carry out the work – will be quicker to process.
However, if you need term funding, the process will be lengthier as SEFA has to complete thorough due diligence before lending the money.
To speed up the process, SEFA advises that you send through all the supporting documentation as listed on the funding checklist.
Who Can Get Funding From SEFA?
Anyone who owns and operates a CIPC-registered business in South Africa could be eligible for a SEFA loan or funding. Additionally, the business should be 100% owned by South African citizens, be registered and compliant with SARS, and in some instances registered on the national SMME database.
However, certain funds like the Business Rescue Package or the Township and Rural Entrepreneurship Programme require you to meet basic criteria regarding the location of the business. Furthermore, with products like the SEMS, the organisation needs to be primarily black-owned and black managed.
That said, anyone who is under debt review or who has a business partner who is under debt review cannot get funding from SEFA.
What Supporting Documents Do You Need to Get Funding from SEFA?
The supporting documents you need to provide will depend on the fund you’re trying to access. For example, those who are approaching SEFA for the Small Enterprise Manufacturer Support will need to provide the following documents:
- FICA Documents
- 6-Month Bank Statements
- Business Incorporation Documents
- Certified Copies of Directors/Members
- Annual Financial Statements or Management Accounts not older than 3 months.
- Business Profile
- Copy of Lease or Proof of Ownership
- A 12 Month Cash Flow Projection
- Copy of Contracts or Purchase Order
- Project Execution Plan
However, you can get a comprehensive list of the supporting documents from the funding checklist during the application process.
SEFA seldomly offers to fund startups. All businesses will have to be registered on the CIPC and trading in some capacity. But, if you’re navigating a SEFA funding application for the first time, why not contact them on 012 748 9600 or email them at firstname.lastname@example.org?