Established by the National Empowerment Fund Act No 105 of 1998, the NEF is a driver and a thought-leader in promoting and facilitating black economic participation through the provision of financial and non-financial support to black-owned businesses, as well as by promoting a culture of savings and investment among black people.
FUNDING FROM R250 000 TO R75 MILLION
The NEF is an agency of the dtic mandated to grow black economic participation. Accordingly, its funding mandate is directed by the Codes of Good Practice on Broad-Based Black Economic Empowerment, as well as by the Industrial Policy Action Plan. The NEF provides business loans from R250 000 to R75 million across a range of sectors, for start-up, expansion and equity acquisition purposes. A key requirement for NEF funding is for the investees to be directly involved in the operations of their businesses.
NON-FINANCIAL BUSINESS SUPPORT (BUSINESS PLANNING AND MENTORSHIP)
In response to the constraints facing some black entrepreneurs, such as the challenge in producing top-quality business plans and the lack of accurate and reliable financial information from applicants, the NEF has since launched a comprehensive online Business Plan tool which is available for free to the public on the NEF’s website, www.nefcorp.co.za
The tool is designed to assist applicants in initiating, improving and refining the quality of their business plans, including completion of financial projections through a step-by–step question and answer process. Clients may reach the NEF contact centre on 0861 843 633, for advice about products, services and processes, as well as for guidance on usage of the online business planner tool.
Through the Post-Investment function the NEF also monitors the performance of its growing number of investees for business risk, and provides ongoing business support when required, which includes free mentorship and business coaching to existing clients. The business mentors are deployed across the country and possess a wide spectrum of business skills were helpful to the NEF investees at the height of the global economic downturn.
HOW TO APPLY FOR FUNDING
Once the business plan has been finalized, applicants must then complete an application form, which is obtainable from the NEF website. The application form also has a business plan guideline which provides the full scope of the topics that the business plan must cover. The application is now ready to be submitted, either in person, by email, fax or post. The submission comprises the application form, the business plan with 5-year financial projections, certified identity copy (ies) and company registration documents. Where relevant, the following documents must also be provided: supplier agreements, lease agreements, contracts, franchise agreements, sale-of-business agreement etc. While the NEF endeavours to complete the entire application assessment process over a three-month period, ultimately, the turnaround time is dependent upon the state of readiness of the applicant, including the submission of all the relevant documents on time. While the NEF, like all financial institutions, places great importance on the quality of the business plan, the assessment of the abilities of the entrepreneur is also essential.
