One of the due diligence processes involves the performance of a credit check, this will reveal reasons for listings, the materiality of the amount and if this can be remedied. It is in the applicants’ best interest to resolve these issues prior to approaching the NEF. Each case is treated on its own merit, taking into account the materiality of the default or judgement and taking into consideration arrangements made with creditors. Applicants are advised to check their credit record prior to making an application and to resolve any outstanding matters with creditors.
Yes you may, however, one of the NEF funding conditions is that disbursement will only be made upon registration of a legal entity. The NEF funds registered legal entities, such as Close corporations (CC), Co-operatives and Private Companies (Pty Ltd).
You will need to complete an application form which is to be submitted with all documents as per page three of this form. Submissions can be electronic or at any of the NEF offices.
a) Franchises
Yes, if all franchising requirements as supplied by the franchisor are met, our funding application process can be followed
b) Property developments
The NEF will view these transactions on the basis that, there has to be a long-term sustainability aspect to this, such as an expansion of a construction company being a good example of this as opposed to once-off or first time projects that have no Socio economic impact.
c) Petrol Stations
Yes, this is viewed as a normal application to either start or expand a business, the normal application process applies. Applicants should include information as provided by the fuel company.
Grant funding or portions thereof do not have to be repaid whereas loan funding is paid back with interest. The NEF does not provide grant funding but will in some instances assist qualifying enterprises with access to the DTIC and other government grants.
The NEF assists BEE parties with management buy-ins and/or management by-outs of white owned companies and sectors but does not find the empowerment parties for the non – BEE compliant businesses.
The NEF criteria stipulates the thresholds for each product category with a minimum requirement of at least equity holding in the case of Corporate Fund Products and increasing to 50.1% in the case of 25.1% Imbewu Fund Products.
Equity funding is when the NEF as a financier takes a share interest in your business. The applicant would buy these shares back at a later stage. Debt funding is in the form of a loan and repaid with interest over the investment period.
Not necessarily, other contributions that can add value to the transaction will be viewed favourably e.g. industry experience and the quality of the transactions being funded.
We may not require security or collateral in the form required by banks, but we can ask entrepreneurs to contribute towards the transaction. Our interest rate structure also differs from what the banks will charge depending on the level of funding and the fact that, the NEF will in most cases, bear higher risk provided the return is also higher.
Q11. Is there a limit to the number of ventures that the NEF will fund per individual?
The NEF will offer funding once the applicant has submitted a comprehensive business plan, (on our request*). For other types of assistance pertaining to company registrations, drawing up of business plans; business advisory services and market research, please refer to the attached list.
