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Access to business capital is one of the biggest challenges for tourism businesses. We’ve rounded up some of the options out there.
1.) iKwezi (sefa and TEP)
The ikwezi Tourism Facility (ITF) provides business loans to small businesses in the tourism industry, ranging from a minimum of R10 000 to a maximum of R5 million. A fund of R50 million has been ring-fenced specifically for the ikwezi Tourism Facility, which is managed by a dedicated team at TEP.
To enquire or apply, click here.
2.) Small Enterprise Finance Agency (Sefa)
S
efa offers loans from R50 000 to R5 million to owner-managed businesses based in South Africa, where the owner is involved in the day-to-day running of the business on a full-time basis. Sefa demands that business be conducted with a profit motive and be economically viable and where the forecasted cash flow shows the ability to repay the facility. Businesses must also display sufficient entrepreneurship, skills and experience directly related to the nature of the business.
To see a full list of requirements, enquire or apply, click here.
3.) Nedbank
Mark Rose, Business Banking Head of New Business Development, advises that Nedbank Business Banking does not have any specific funding options for tourism, but the bank can consider/accommodate financing requests as part of its normal lending criteria and within its suite of existing financing products, ranging from property finance through to asset financing, covering fixtures and fittings and working capital.
For further information, to enquire email: business@nedbank.co.za Alternatively, clients may apply online at www.simplybiz.co.za.
4.) Standard Bank
Standard Bank offers loans for start-up businesses. There is no limit on the loan amount granted if the business plan and financial background are in good standing.
To enquire, click here.
5.) Absa Enterprise Development
Absa has two funding options for tourism businesses, namely the Enterprise Development Credit Portfolio and Empowerment Funds.
Absa Enterprise Development Credit Portfolio (EDCP)
The EDCP is a R250-million ring-fenced fund that provides non-traditional lending to SMEs. This means Absa can lend to SMEs that do not have sufficient security to support a loan and who may not have an adequate credit record.
This fund supports SMEs that are in the value chain of a corporate or a government entity. There is no minimum or maximum amount of funds that may be loaned to an SME under the EDCP.
Absa Empowerment Funds
An SME that does not meet the normal lending criteria and which may not be in the value chain of a corporate or government entity, may still be eligible for finance under the Empowerment Funds.
The SME must have a contract to supply a corporate or government entity or a sound business plan that indicates how the SME will generate revenue to repay the loan. The SME must be based in South Africa and show evidence of skills and experience of running the type of business being financed.
To enquire or apply, click here.
6.) First National Bank
FNB provides funding for tourism businesses in any of the following categories: guest houses, lodges, hotels, conference venues, tour operators, travel agents, catering, attractions, restaurants and tour guides.
FNB Business Loan provides loans up to R400 000 for an active business account holder in good standing, operating for 15 months or more, with annual turnover of R500 000 or more. FNB also provides insurance for tourism businesses.
To enquire or apply, click here.
7.) National Empowerment Fund (NEF)
NEF funding is currently obtainable from these funds:
iMbewu Fund
This fund is designed to support black entrepreneurs wishing to start new businesses as well as support existing black-owned enterprises with expansion capital. The fund supports these entities by offering debt, quasi-equity and equity finance products with the funding threshold ranging from a minimum of R250 000 to a maximum of R10 million.
Rural and Community Development Fund
The Rural and Community Development Fund was designed to promote sustainable change in social and economic relations and supporting the goals of growth and development in the rural economy through financing of sustainable enterprises. The funding threshold ranges from a minimum of R1 million to R50 million.
To see a criteria list, enquire or apply, click here.
8.) Industrial Development Corporation (IDC)
The IDC offers business funding of no less than R1m million, which will be granted depending on the strength of the business plan.
Requirements for acquisitions/expansion/working capital are three years’ audited financial statements, a signed memorandum of agreement (MOU), a due-diligence report (both buyer and seller) and a business plan and five years’ financial projections.
Once the above documents have been compiled, send your draft business plan to callcentre@idc.co..za
9.) The National Lottery Distribution Trust Fund (NLDTF)
The NLDTF has been part of the emergence of an increasingly diverse arts and culture environment. Funding from the NLDTF is also allocated to various forms of national heritage, historical heritage and buildings that reflect our heritage.
The NLDTF has allocated more than R3 billion to arts, culture and national heritage organisations.
To enquire, click here.
10.) Department of Economic Development and Tourism (Western Cape Government)
Through its Enterprise Development Fund, the department offers services and support programmes to develop and grow small business in the Western Cape. The fund provides financial assistance in the form of a low-cost loan ranging between R250 000 and R75 000 000 to qualifying entities.
To enquire or apply, click here.
11.) Cape Town Tourism
Cape Town Tourism has developed the Board Development Fund Programme to further develop and grow existing SMME businesses. The chosen businesses will each receive R50 000 in support of their business’s growth as well as non-financial support by Cape Town Tourism via coaching, mentoring and complimentary membership, etc. The programme will run till August 31, 2015.
To enquire, click here.
12.) National Youth Development Agency (NYDA)
The NYDA Grant Programme provides young entrepreneurs with an opportunity to access both the financial and non-financial business development support to establish their businesses. The programme focuses on youth entrepreneurs and offers grants from R1 000 to R100 000.
Young people interested in accessing the grant programme will have to commit to participate in the NYDA mentorship and voucher programme for a minimum of two years.
To enquire, click here.
Additional support
1.) Khula Enterprise Finance
Khula Enterprise Finance facilitates access to finance by people who have not had the opportunity to accumulate sufficient wealth to provide as collateral security to the banks to obtain a loan for starting a new business.
Khula Enterprise Finance offers the Khula Credit Guarantee Scheme for a guarantee that acts as collateral for 80% of the total loan amount, with a loan maximum of R1 million.
To enquire or apply, email khula@mweb.co.za
2.) Tourism KwaZulu-Natal
Tourism KZN assists in the formulation of business plans for approved proposals as well as sourcing funding for the project from the relevant funding institutions.
To enquire or apply, click here.
3.) National Youth Development Agency (NYDA)
The NYDA also offers Business Opportunities Support Service (BOSS) that assists youth entrepreneurs by sourcing viable business opportunities, linking youth entrepreneurs to identified business opportunities, providing mentorship, training and business development support.
To enquire, click here.
4.) Small Enterprise Development Agency (Seda)
The Small Enterprise Development Agency does not offer funding but provides business development and support services for small enterprises through its national network, in partnership with other role players in the small enterprise support.
To enquire and find out more about how you can fund your business, click here.
Seda's Community Public Private Partnership (CPPP)
The Community Public Private Partnership (CPPP) programme aims to ensure the growth and sustainability of co-operatives and collectively owned enterprises by facilitating public and private partnerships.
The CPPP programme aims to identify markets, resources, technical assistance and capacity-building opportunities that will enhance competitiveness and sustainability of enterprises.
To enquire, click here.
Have we left something out? Help us keep this list updated by emailing editor@tourismupdate.co.za.
