Securing funding for start-ups and other business ventures in South Africa is ever becoming a challenge; however there are some funding opportunities still accessible.
Business start-ups have no hope of getting off the ground without financial support especially among the historically and previously disadvantaged groups in South Africa. Self funding has always been an option for financing one’s start-up and or business venture but the major drawback for most local entrepreneurs is always the lack of funds. Accessible funding opportunities for business owners do exist for local entrepreneurs but the lack of sound knowledge of the business financing sector in the country, and the absence of financing consultants act as hindrances to securing proper funding to start business operations.
Securing funding in South Africa is a daunting task especially in this current economic climate which has seen many investors pulling out and weighing their options. There are other facilities which provide considerable business funding and support in the country like the National Empowerment Fund (NEF). This fund was designed to support broad based Black Economic Empowerment within sectors identified by the government as key drivers to the economy’s growth. This fund finances black owned and black empowered star-ups and businesses. The Industrial Development Corporation (IDC) is also another opportunity which entrepreneurs can access business financing. IDC was established as a way to promote economic and industrial development projects in the country to create and promote viable partnerships.
The Small Enterprise Development Agency (SEDA) is mandated to implement government’s small business strategy, design and implement a standard and common national delivery network for small enterprise development. SEDA integrates and supports small enterprises; this agency can be accessed by anyone who is willing to go through the application processes. Information Communication Technologies start-ups are on the rise in the country mainly because of the 4th industrial revolution and securing funding is still hard however the Technology Innovation Agency (TIA or the Agency) finances and provides support for businesses in this sector. TIA was set-up with the objective of stimulating and intensifying technological innovation; improve economic growth and the quality of life in South Africa.
Communities Fund and Small Business Hub Programme and Small Business Hub network is by far the most popular and influential financing institution in South Africa which supports small and medium enterprises however in the vicinity of Anglo American Mines. The fund assists entrepreneurs with seed and working capital through loan finance. Another institution which provides financing for business operations in the country is Sasfin, it is a versatile form of funding that allows enterprises of any size to unlock their business potential without the burdens of excessive debt. The challenges which these institutions and funds usually are the lack of adequate information on the application process and access to the requisite information of finding the proper institution or fund which is relevant to an entrepreneurs’ needs. Information on how to access these funds in South Africa is usually opaque no matter the fact information on business financing is in the public domain. Emerging entrepreneurs in South Africa are coming out of the pool of the previously disadvantaged and it is not easy for them to be up to speed on business financing facilities open to them. In instances where information is available, the procedural stages of securing financing are not clear either because of illiteracy related issues or the funds’ application requirements might be difficult to meet for the entrepreneurs.
The National Youth Development Agency (NYDA) has for years served South African youth in various capacities especially of providing support for start-ups; small to medium enterprises and other business ventures to start their operations. One of the funds which this agency helps entrepreneurs to secure is the National Youth Fund. The fund aims to integrate and mainstream youth sustainable development by initiating, facilitating, implementing, coordinating and monitoring youth development interventions. The challenges of managing to get funded by the National Youth Fund in local communities in the country are mostly associated with entrepreneur attitudes and patience to go through the required process for one to be granted the relevant support and financing.
Funding opportunities are diverse in South Africa however the challenges associated with securing funding for business enterprises are diverse, notably entrepreneur’s negative attitudes towards meeting the administrative requirements, lack of access to proper and relevant financing information and financial advisors and lack of proper research in regards to the relevant fund to apply to and how. However opportunities for getting funded are available in the country.