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What SEDFA Finances: A Breakdown

SEFA provides financial support to small and medium enterprises (SMMEs) and co-operatives of up to R 15 million. Their funding is designed to cover various business needs, from starting up to expanding.


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1. Types of Financing Offered:

SEDFA offers three main types of funding, often in combination:


  • Debt Finance (Loans): This is the most common. It's a sum of money provided to a business that must be paid back over an agreed period with interest. Loan amounts can range from micro-loans (a few thousand Rand) to several million.



2. What the Funds Can Be Used For (Eligible Costs):

SEDFA financing can typically be used to cover a wide range of business expenses, including:


  • Start-up Costs: For qualifying new businesses.

  • Asset Finance: Purchasing new equipment, machinery, vehicles, or furniture essential for your operations.

  • Working Capital: Money for day-to-day operations like rent, salaries, utilities, and buying stock.

  • Expansion Projects: Funding to enter new markets, increase production capacity, or open new branches.

  • Franchise Fees: For purchasing a franchise outlet.

  • Building Renovations: Refurbishing or upgrading business premises.

  • Business Plan Development: Some support may be available for the costs of creating a professional business plan.

  • Technology Acquisition: Purchasing software or hardware needed to run the business.


3. Who SEFA Prioritises:


SEDFA has a strong focus on empowering specific groups that are key to South Africa's economic transformation:

  • Youth-owned businesses (owners aged 18-35)

  • Women-owned businesses

  • Black-owned businesses

  • People with Disabilities

  • Businesses operating in rural areas or townships

  • Co-operatives


4. Key Sectors SEDFA Supports:


While not exclusive, SEFA often focuses on these sectors:

  • Manufacturing

  • Agriculture and Agro-processing

  • Construction

  • Retail and Wholesale

  • Services (e.g., Business Services, Tourism, Hospitality)

  • Green Economy / Renewable Energy projects

  • Transport

  • Information and Communication Technology (ICT)


Typical SEDFA Required Documents Checklist


A. Company Documentation & Certificates


  • Certified Copy of Company Registration Certificate (e.g., CIPC CK1/CM1, COR14.3)

  • Certified Copy of Memorandum of Incorporation (MOI) or Founding Statement (for CCs)

  • Valid Tax Clearance Certificate or PIN (Issued by SARS) - This is critical.

  • B-BBEE Status Level Verification Certificate or Sworn Affidavit

  • Business Profile from CIPC

  • Sector-specific Licenses (if applicable), e.g., liquor license, health certificate, etc.


B. Financial Documents


For Existing Businesses (Trading for >1 Year):

  • Annual Financial Statements (for the past 2-3 years), signed by an accountant.

  • Latest 6 - 12 months of Business Bank Statements.

  • Management Accounts (not older than 3 months).

  • Aged Debtors and Creditors List (not older than 3 months).

  • VAT Statements/Returns (if registered for VAT).

  • Pay-As-You-Earn (PAYE) Statements (if you have employees).

  • Asset and Liability Statement.

For Start-Ups or New Businesses:

  • Projected Financial Statements (Projected Income Statement, Balance Sheet, and Cash Flow Statement) for at least 3-5 years. These must be realistic and well-researched.

  • Personal Bank Statements of the owner(s) for the last 6 months.

  • Proof of Investment/Equity from the owner(s) into the business.


C. Owner/Director Personal Documents


  • Certified Copies of IDs of all owners/directors/members.

  • Certified Copies of Proof of Residence of all owners/directors (not older than 3 months).

  • Comprehensive CVs/Profiles of all owners and key managers, highlighting relevant experience and skills.

  • Personal Asset and Liability Statements of the owners.


D. The Business Plan


This is the most important supporting document. It must be detailed and include:

  • Executive Summary

  • Company Description

  • Description of Products/Services

  • Detailed Market Analysis (Target market, competitors)

  • Marketing and Sales Strategy

  • Management and Operational Plan

  • The Funding Proposal: A clear breakdown of exactly how much funding is needed and specifically how the SEFA funds will be used (e.g., R200k for machinery, R50k for working capital, R30k for renovations).


E. Security/Collateral Documents (If Available)


  • Quotes/Pro-forma Invoices for the assets to be purchased (if applicable).

  • Proof of Ownership for any property offered as collateral.

  • Deeds Office Search for properties.


Get support to raise capital via SEDFA here:



 
 
 

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