Arts and Culture Venture Capital Fund

Arts and Culture Venture Capital - Discontinued

NB: Please note that this fund was discontinued and is no longer accepting applications.

The fund was designed to promote and develop the arts and culture sector by providing affordable loans to start and/or expand small businesses. It was an important source of finance for start-up entities and for companies that have had limited operating history which do did not have access to capital markets. The Department of Arts and Culture realised that to achieve radical economic transformation, access to funding was not to be limited to few businesses. The Funds were to assist businesses with potential to be self-sustainable and not rely on government for grant funding. Funding was to be made available to businesses in all provinces, where more job opportunities were be created.

This was the qualifying criteria:

  1. All compliance requirements listed below were to be submitted;
  2. A brief profile of artists that were to be performing were to be included in the business plan;
  3. Justification for proposed pricing of the event and line up of artists. Demonstration of the artists’ ability to draw a crowd was to be submitted as part of the business plan;
  4. There was to be commercial returns at the end of the project, in other words the revenue to be made through ticket sales was to exceed the total cost of the event;
  5. The venue to be used was to be available, have enough capacity and be suitable for the event;
  6. Reputable distribution channel was to be used for ticket sales; and
  7. A demonstration of how the proposed timing of the show was the optimal, that is, it should not coincide with other events that were to compromise the ticket sales.

Compliance Requirements were

  1. Completed NEF application form;
  2. Business plan and projected Income Statement, Balance Sheet and Cash Flow Statement for the duration of the funding period;
  3. Cash flow projections indicating how the loan was to be repaid over the term and the loan duration;
  4. Registration documents as a legal entity;
  5. Valid tax clearance certificate;
  6. Minimum of 50.1% shareholding by black South African citizens as defined in the B-BBEE Act who were resident within the borders of South Africa;
  7. In need of start-up or expansion capital;
  8. Required loan from Arts and Culture Venture Capital Fund of not less than R250,000 and not more than R5 million; However applicants were allowed to apply for normal NEF funding above R5 million;
  9. Loan repayment was to be within twenty four (24) months;
  10. Own contribution of 5% or more towards the project;
  11. Audited/reviewed financial statements for the past three years along with management accounts not older than three months ONLY for businesses that had been in operation;
  12. A minimum of three (3) months was to be provided between the closing date of the advert and the actual date when the first disbursement on the loan was required to allow enough time for the project;
  13. All quotations were to be submitted with the application form which amounted to the funding requirement. A minimum of three quotations for procuring goods and services unless if it was a procurement of a unique service such as artists;
  14. Business must have had an active bank account;
  15. Financing any asset such as equipment or infrastructure was to be for the purpose of start-ups or expansion with existing contracts or orders;
  16. Social impact in the form of job creation and economic empowerment by indicating how many job opportunities were to be created; Employment numbers were to be stated by race, gender,disability,etc. for the project to be funded;
  17. Applicants were to be actively involved in the day-to-day operations of the business. If applicant was employed full time, he/she may have been required to resign from his/her employment and provided the Fund manager with proof of resignation;
  18. Necessary skills, experience or with the potential skill appropriate for the enterprise to succeed;
  19. Have a profit motive and clearly indicate how the loan was to be repaid;
  20. Applicant’s projections were to show growth prospect in order to be self- sustainable in future; and
  21. Brief profile and financial strength to settle projected receipts when due of the applicant’s customer(s) or sponsor(s).
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