Need funding to grow your business
Most businesses need capital before they can really get going. As a small business owner, you generally need equipment, materials and stock, as well as money to pay salaries, rent, telephone etc, until your business becomes profitable. But before going into the different ways that you can find finance to grow your business, you need to have thought clearly about what your business will do, how you will do it, what it will cost, and how much money you will make. To obtain finance, a prospective business owner needs to convince the bank or investor that he will be able to pay the money back.
In general anyone wanting to finance a business has three basic options:
- Use your own money – this is by far the quickest and simplest route to take but not many people are in that fortunate position.
- Borrow money from others – this might be an informal loan from family or friends or a formal loan from a lending institution like a bank; or
- Get others to invest in your business – this means that they will own a part of your business and share in the profits and the decisions.
While most small businesses start up with money from friends and family, many then look for additional funding to help them grow their businesses to the next level. In their quest to stimulate small business growth and job creation, a number of initiatives by both government and private funders are available including:
R12.8-million CDI Growth Fund to boost SME growth and job creation.
The CDI Growth Fund is a grant fund specifically for growing South African small businesses who need a cash injection to scale up further and create jobs. Since its launch in 2017, it has already contracted with 38 SMEs, who have collectively created over 160 jobs.
The CDI Growth Fund is managed by CDI Capital, which was incorporated as a subsidiary of the Craft and Design Institute (CDI) in 2016 to catalyse funding for SMEs. The funding has been enabled through contributions by the National Treasury’s Jobs Fund, the Technology Innovation Agency (TIA), and the Western Cape Department of Economic Development and Tourism (DEDAT). The Fund is in the second year of a five-year disbursement period.
The CDI Growth Fund is open to South African-owned businesses who operate within South Africa, who are at least one year old with turnover or assets above R1m.
Each applicant must demonstrate their year-on-year growth and/or the potential for sufficient growth and must be tax compliant. Applicants also need to match 20% of the grant contribution of the Fund through a cash contribution to achieve agreed objectives. Importantly, the business must be able to create new jobs.
SMEs that meet the criteria for funding can apply online, and are taken through a diligent process of selection and support, whereby successful applicants contract for a three-year intervention and disbursement plan, performance managed by quarterly reporting, oversight and inspection, bespoke mentor ship, and business development support.
According to Ryan Rode, project coordinator for CDI Capital, the Fund is ahead of its key deliverable, namely, the creation of permanent jobs through participating SMEs. “The CDI Growth Fund is very specific in its focus – we are looking for SMEs who are about to employ new staff to meet growing demand and who need the capital to expand their operations. The funding is a grant and it is not paid back to the Fund; and can help to leverage additional funding and de-risk loans. It’s a fantastic opportunity for a growing South African business that is needing to employ new staff.”
The deadline for applications is 12 July 2019.
For more information and to apply, please visit this website Growth Fund-cdicapital
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