NEF iMbewu Franchise Finance

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Organisation: National Empowerment Fund

The iMbewu Fund is designed to support black entrepreneurs wishing to start new businesses as well 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.

 

The Franchise Finance product is aimed at assisting black entrepreneurs who wish to acquire a franchise license. The product is aimed at entrepreneurs who wish to start their own businesses by buying a franchise linked to a particular brand to reduce risks associated with start-up businesses lacking a track record.

Qualifying Entrepreneurs/Businesses:
  • The NEF prefers to fund well established franchise concepts
  • Active managements involvement by BEE parties is required
  • Minimum BEE shareholding of 50.1% is a requirement
  • NEF funding of franchises is through loan instrument with the term matching the duration of the franchise license, however, up to a maximum terms of 7 years
  • BEE party must have been pre-approved by the franchisor before approaching NEF
  • NEF funding generally limited to R10 million
  • NEF will fund SME; using mainly debt
  • The NEF will exit from the investment in 5 to 7 years
Documentation
Start-Up Business:
  1. Application form
  2. Business Plan
  3. Five (5) year financial projections (Income Statement, Balance Sheet and monthly Cash Flow Statement) with first year prepared on a monthly basis
  4. Personal Statements of Assets and Liabilities of all members or directors including those of spouses if person is married in Community of Property
  5. Certified ID copies of all members or directors
  6. Registration documents and all the relevant legal documents relevant to the entity
  7. Detailed profile of the Franchisor
  8. Historical financials of other franchises that are similar in size and in similar locations
  9. Indication from the Franchisor of how much a new Franchise in a similar location would cost
  10. Indication of whether the lease agreement will be ceded to the new company after the sale or a new lease agreement will be signed if lease is ceded, how long will it still run before renewal? New lease if it is a new franchise.
  11. Fica compliance – Proof of residence
  12. Detailed CV of principle Applicant
Existing Businesses:
  1. Application Form
  2. Business Plan
  3. Affidavit from members or directors that they are aware of the contents of the application form
  4. Three (3) year audited financials (Income Statement, Balance Sheet, Cash Flow Statement)
  5. Five (5) year financial projections (Income Statement, Balance Sheet and monthly Cash Flow Statement) with first year prepared on a monthly basis
  6. Recent management account (Income Statement and Balance Sheet)
  7. Personal Statements of Assets and Liabilities of all the members or directors including those of spouses if person is married in Community of Property
  8. Business bank statement for the past twelve (12) months
  9. Certified ID copies of all member or directors
  10. Registration Documents and all the relevant legal documents relevant to the entity
  11. Detailed profile of the Franchisor
  12. Details of why the business is for sale
  13. Sale Agreement
  14. Franchise Agreement
  15. Historical financials of other franchises that are similar in size and in similar locations
  16. Indication from the Franchisor of how much a new Franchise in a similar location would cost
  17. Indication of whether the lease agreement will be ceded to the new company after the sale or a new lease agreement will be signed if lease is ceded, how long will it still run for before renewal? New lease if it is a new franchise.
  18. The prospective buyer must have been approved by the franchisor
  19. Fica compliance – Proof of residence
  20. Detailed CV of principle Applicant*
*www.nefcorp.co.za
Offices – All 9 Provinces
Application Process – Physical or Email(applications@nefcorp.co.za)

Contact Details

Website: http://www.nefcorp.co.za
Telephone: 0861 843 633
Email: info@nefcorp.co.za
Related Documents:
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