SEFA

SEFA is a national agency that provides funding to small businesses and cooperatives in South Africa.

Its head office is in Centurion, Gauteng. The agency offers financial products and services to eligible businesses in different sectors, including:

• Services
• Manufacturing
• Agriculture
• Construction
• Mining
• Green industries

Overview of SEFA: Supporting small businesses and cooperatives in South Africa

SEFA aims to help businesses grow and create jobs by offering loans, credit facilities, and credit guarantees. Their mission is to make finance more accessible to small businesses and cooperatives nationwide and to support their development through partnerships and innovative financial products.

Accessing SEFA products through partnerships and intermediaries

SEFA forms partnerships to contribute to the growth of small businesses beyond providing financial support. These partnerships include subsidiaries, associates, and intermediaries.

To create sustainable job opportunities, SEFA supports small, micro, and cooperative enterprises by providing financial and business support. The agency also collaborates with the public and private sectors to increase accessibility to their products.

SMMEs and cooperatives can access SEFA products through commercial banks, cooperative financial institutions, micro-finance intermediaries, retail financial intermediaries, and strategic partnerships.

Comprehensive strategies for enterprise development

SEFA’s main task is to provide access to finance efficiently and sustainably to these enterprises throughout South Africa.

SEFA achieves this by offering wholesale and direct lending credit facilities or products, credit guarantees, supporting financial intermediaries, creating strategic partnerships with institutions, monitoring financing activities, and developing innovative finance products through partnerships.

They supported small businesses in celebrating Global Entrepreneurship Week with more than R2 million in rewards. These were awarded to winners of SEDA's "Pitch for Funding" programme, which held 14 provincial boot camps since June 2022.

The boot camps attracted over 1,000 small enterprises, from which 34 finalists competed in the finals held in Gauteng. Nine finalists then proceeded to the Inaugural National SMME and Co-Operatives Summit, where five emerged as winners. This initiative is supposed to reduce the discrepancy between what an investor expects and what an entrepreneur needs by providing access to credit.

SEFA offers equipment financing solutions tailored to meet your business's individual needs. The main aim of this funding option is to help you buy a wide range of new or used movable assets like machinery and equipment, provided that they are identifiable through serial numbers.

Is this the right type of finance for your company?

By choosing equipment financing, you don't need to use your own funds to lease or acquire equipment. Furthermore, the purchased equipment can be used as collateral for the loan. The loan can be repaid over a maximum period of 60 months or for the economic life of the asset, whichever ends first.

Immediate cash flow: SEFA's bridging loans

SEFA provides bridging loans that assist businesses in financing their working capital requirements, such as operating expenses and stock. This short-term credit solution is designed specifically for business-to-business transactions and is ideal for companies with secure contracts with other businesses.

The bridging loan allows businesses to fulfil their short-term financial obligations by providing them with immediate cash flow. It’s a highly attractive funding option for businesses due to its flexible repayment terms and low-interest rates, among other benefits.

How revolving credit can help businesses with cash flow needs

SEFA offers revolving credit facilities, which provide borrowers with a line of credit that can be used as needed. This type of credit is particularly useful for clients with contracts with predetermined lifespans and values.

One of the key advantages of revolving credit facilities is their flexibility, with repayments structured as per the business's cash flow projections, making it a convenient financing option for companies.

SEFA's term loans: Financing for moveable equipment

SEFA provides term loans to help businesses purchase movable assets, such as office furniture, fixtures, and fittings, that cannot be identified through serial numbers.

The assets acquired through a term loan can also be used as collateral for the loan. This financing option is advantageous for businesses because it offers immediate access to cash flow, flexible repayment terms, and the ability to acquire necessary assets without using their own funds.

Equipment loans of up to 5 million: flexible and accessible finance

Many SMEs in the country operate with outdated or inefficient equipment, which can limit their productivity and competitiveness. By providing affordable financing for equipment, SEFA is helping SMEs to upgrade their operations and become more efficient, which can in turn drive growth and create jobs

SEFA's equipment loans are designed to be flexible and accessible, with repayment terms ranging from 12 to 60 months. Eligible SMEs can borrow up to R5 million (approximately USD 350,000) to purchase equipment such as vehicles, machinery, and office equipment.

The loans are available to both start-ups and existing businesses, and SEFA provides support throughout the application process to ensure that SMEs understand the terms and conditions of the loan. By providing affordable and accessible financing for equipment, SEFA is helping SMEs in South Africa to build their businesses and contribute to the country's economic growth.