Small Enterprise Finance Agency offers ray of hope to beleaguered small-business owners

Freedom Day in South Africa celebrates the country’s first democratic election in 1994 after the demise of the apartheid regime. This year, though, for many small-business owners there will be no celebrations. They are still reeling from the financial blow they were dealt by the Covid-19 pandemic and resulting national lockdowns.

One ray of hope is that they could try to access the assistance offered by the Small Enterprise Finance Agency (sefa). While the Covid-19 pandemic is far from over, sefa is taking its mandate seriously and continues to think creatively about ways to assist small businesses.

“In addition to giving a financial lifeline to thousands of small businesses across this country, we are also introducing creative new ways to extend finance. For instance, over this past financial year, sefa in partnership with the Department of Small Business Development and Seda introduced new programmes like the Blended Finance Programme and Small Business Innovation Fund (SBIF),” explained sefa’s CEO, Mxolisi Matshamba.

The SBIF is geared towards supporting start-ups, while the Blended Finance Programme offers a combination of a grant and a loan to small businesses.

Working with the Department and Seda, the Covid-19 Response Programme was also launched to assist struggling businesses. Small businesses have access to:

• The Tourism Equity Fund

• Township and Rural Enterprise Programme (TREP)

• Small Enterprise Manufacturing Support Programme (SEMSP)

• Post-investment Support Programmes for sefa clients

In an effort to alleviate the pressures on small-business owners, sefa continues to honour its core function, which is to foster the establishment, development and growth of small, medium and micro-enterprises (SMMEs) and cooperatives, and to contribute towards poverty alleviation, job creation and economic growth. This has been maintained throughout the Covid-19 pandemic lockdowns in South Africa.

In the 2019/20 financial year alone, sefa approved loans to the value of R1.4-billion. Finance is offered to qualifying businesses in a range of sectors such as services (including retail, wholesale and tourism); manufacturing (including agro-processing); agriculture (specifically land reform beneficiaries and contract-farming activities); construction and green industries (water, energy and waste).

South African citizens or permanent residents who have a fixed physical address can apply for funding for their small businesses from sefa. The registered business owner should also have a business plan suited to sefa’s loan application requirements. A valid tax clearance certificate and the ability to repay the sefa loan is a requirement, too. These basic requirements form part of a longer list on how small-business owners can access funding with sefa.

To explore the funding options, small-business owners are encouraged to take sefa’s short quiz on its website. The questions asked help match business owners with sefa’s offerings. If a match is not possible, sefa will continue to assist as best it can by referring clients to alternatives forms of assistance.

Freedom Day may be less celebrated by small business owners this year, but through sefa, financial freedom is possible.