How Women Entrepreneurs Can Access Funding to Grow Their Businesses

Women are having a tremendous impact on South Africa’s economy — creating new jobs and generating revenue. According to new research released by Facebook, women entrepreneurs have the potential to boost the South African economy by R175bn by 2022. Most women entrepreneurs start from a lower base. Why? Because they have less start-up and investment capital and possess little or no collateral security. That means businesses run by them are less likely to grow than those run by men.

After starting their business access to funding becomes another hurdle to growth for most women entrepreneurs who are trying to build start-ups. Without capital to fund growth, it is much harder to take on new staff, expand abroad or invest in the business. The Small Enterprise Development Agency (SEDA) discovered that 72% of micro-enterprises and 40% of small enterprises are currently owned by women. Consequently, government and private enterprises have put programmes and funds in place aimed at empowering the women of South Africa.

There are possibilities for finding funding,  but first, you need to know what kind of funding your business needs  To help you with that we prepared a list of funds and financial assistance programmes that provide funding for women entrepreneurs.

1. Business Partners Women in Business Fund

This fund is aimed at increasing access to finance for female entrepreneurs, the Business Partners Women in Business Fund seeks to afford South African women a fair and equal opportunity to start, expand or purchase an existing business. The Fund will offer finance between the value of R500 000 and R50 million per investment over a five-year financing period. All female-owned businesses (at least 50%) that are commercially viable with female owners active in the business will be considered for financing.

Female entrepreneurs financed through the Women in Business Fund will be supported with additional value-added services such as dedicated industry-specific mentors and technical assistance (mentorship) grants of up to R25 000 to aid in the development of the business. A further R35 000 interest free loan for technical assistance, should it be required, will also be available. They will also have access to information, via a dedicated LinkedIn page Women in Business Africa, and networking opportunities, such as workshops and the annual Women’s Month seminar.

2. Enablis Acceleration Fund

The Enablis Acceleration Fund is a partnership between Enablis Financial Corporation SA (Pty) Ltd and Khula Enterprise Finance Limited. The main objective of the fund is to improve access to SME early-stage funding while reaching out and supporting SMEs that are developing in remote or rural areas with a view to creating new sustainable jobs that alleviate poverty and reduce unemployment. This acceleration fund offers equity and debt instruments over loan periods no longer than 60 months.

To qualify for the fund you must meet the following requirements: be a South African SME that is accredited by the Enablis Entrepreneurial Network; are black and women entrepreneurs for startups and for the expansion of a business; SMEs involved in all sectors, specifically ICT, transport, tourism, agriculture, and services industry and SMEs that need working capital and/ or asset finance. To become a member visit the Join Enablis section at http://www.enablis.org/ and fill out the application form.

3. National Empowerment Fund (NEF)

The National Empowerment Fund (NEF) was established by the National Empowerment Fund Act, 1998 (Act No. 105 of 1998). The NEF is a driver in promoting and facilitating black economic participation by providing financial and non-financial support to black empowered businesses and promoting a culture of savings and investment among black people. The NEF Women Empowerment Fund is aimed at accelerating the provision of funding to businesses owned by black women.

The NEF provides business loans from R250 000 to R75-million across all industry sectors, for startups, expansion, and equity acquisition purposes. Read more: A Guide to Government Funding for SMEs

4. Isivande Women’s Fund (IWF)

This fund aims at accelerating women’s economic empowerment by supplying cost-effective, user-friendly, and responsive finance. The IWF offers support services to improve the success of your business. It targets businesses that are starting up, expanding, rehabilitating, franchising, and those that need bridging finance. The aim of the fund is to create self-sustaining black- and female-owned businesses by offering primary financial and non-financial support.

Female-owned companies need to meet the following criteria to be eligible: Your business must be operational for 6 months.

• Your business requires early-stage capital for expansion and growth.
• 50% plus one share owned and managed by women.
• Your business requires potential growth and commercial sustainability.
• Your business must improve social impact with employment creation.

Contact IWF for funding

Businesses that are eligible and need funding between R30 000 and R2 million can submit their application.

5. IDF Managers Funding Alitheia Identity Fund (AIF)

In an effort to address the lack of access to funding faced by many African women entrepreneurs, Tokunboh Ishmael, Polo Leteka and Anne-Marie Chidzero joined forces to launch the Alitheia Identity Fund (AIF), a pan-African SME fund that invests in innovative, growth stage SMEs that are women-led or gender-balanced in the Sub-Saharan Africa region.

The joint venture sees two established women-owned fund management companies come together – Nigerian based Alitheia Capital Limited which focuses on SMEs in the finance, energy and housing sectors and co-founded by Ishmael (CIO); and Identity Development Fund Managers (IDF), a South African based equity firm co-founded by Leteka (principal partner and COO).

Want to apply for funding but your SARS is not in order? Send us an email today at info@mgt-accounting.co.za