If you are an entrepreneur with a great idea, it is always good to look into the options that exist for funding small businesses. You could find a way to grow your idea into a successful business that will set you and your family up for life.
Most people have dreams to make huge money that will allow them to live out all their fantasies, look after their families and friends and have all the material items they have ever yearned for. There are many ways in which people aim to make their money but one of the best, hardest and most rewarding is definitely starting your own business.
Starting your own business
If you have a successful business plan, the experience and expertise to get it off the ground, the time to put into your new endeavour and the tenacity to ensure that you do not give up, your only challenge will be financing your business.
It is a good idea to look into options that exist for funding small businesses as there are many ways to find the money to back your idea. If you believe in your business, you could make a potential financer believe in it too. Knowing your options, making good choices and having belief in yourself and in your ideas is the way forward.
There are many companies and agencies that specialise in helping new businesses grow. To start your business, you will need enough capital for rent, equipment, stock and for salaries and other regular expenses until your business begins making money. The following is a list of some of your options for funding your small business:
- The Small Enterprise Development Agency (SEDA)
SEDA is an initiation of the South African Department of Trade and Industry. It was started in 2004 through the National Small Business Amendment Act. The aim of the agency is to promote, support and grow small businesses in the country, to help small businesses become sustainable and to promote partnership with big international business. SEDA offers good advice to any potential entrepreneur and to those who have already started their businesses.
- Khula Enterprise Finance Ltd
This company has over thirteen years experience in supporting, growing and maintaining small local businesses. According to Khula Enterprise Finance’s website, the company is a “wholesale finance institute which operates across the public and private sectors, through a network of channels to supply much needed funding to small businesses”. These channels include many of South Africa’s reputable financial institutions.
There are many financing solutions available for small businesses including mentorship services, finance via the bank, finance for agricultural businesses, financial intermediaries and Khula joint venture funding. Their head office is based in Pretoria but they have regional offices in the Freestate, Kwa-Zulu Natal, North and South Gauteng, the Western Cape, the West and East of the Eastern Cape, the Northern Cape, Mpumalanga, Limpopo and the North West.
- Investor’s Network
Investors Network is a company that aims to fund South African business ideas and make them successful and sustainable. They talk about several different options for funding your small business including: venture capital, asset based financing, long term debt, lines of credit, letters of credit and loan workouts.
- Venture capital companies will give you money in return for equity in your company. Venture capital firms look at your future prospects rather than your company history, making this form of funding ideal for a new business.
- Asset based financing is where a lender accepts the assets of a company as collateral in exchange for a loan.
- Long term debt is usually where commercial financial service providers will give loans with interest rates payable over a long period of time by the new business.
- A line of credit loan provides short term cash and is repaid quickly.
- Letters of credit is a promise by a bank that they will perform a specific task if the company fails to make their payment. This is useful as it will assure new creditors of the new company’s trustworthiness.
- A loan workout is a flexible loan where the terms and conditions are worked out to best suit both the creditor and the small business.
Any of the above businesses, and others like them, will have several options that might suit you.