WAYS SMALL BUSINESS CAN SECURE FUNDING
Running a small business comes with loads of challenges and it requires a great deal of bravery and resilience. To put fuel in the fire, the influx of COVID-19 in 2020 exacerbated the challenges that small business owners were already facing. The stability of other small business was left hanging in the balance due to the pandemic and business owners, small ones to be precise, were left perplexed as where they could derive funding to keep their business afloat. Tough times can make people become innovation and think out of the box, bringing ideas about starting their business. Others can spot a gap in the market that is when an entrepreneurial journey gets embarked on. When people want to start small businesses, they always ask themselves a lot of questions as to where they can get funding for their businesses. Should I make loan? Do I qualify to make loans? If I make loan, what is in it for the people who will loan me money? These are the questions that many small business owners had asked themselves prior to start to
starting their businesses. Others do not even have answers for the above questions. One sometimes does not need to have capital (savings), having rich friends or relatives to start their own business. They can possibly start with little means they have at their disposal. Even if one does not get a loan, it is still feasible that one can embark on their
entrepreneurial journey and become successful. Most people think of bank when they decide to start their own business. You sometimes do not need a bank!
Crowdfunding
Crowdfunding, strange word, isn’t it? If you are familiar with social media platforms such as Twitter and Facebook, you might have seen with amazement the successful crowd funding initiative carried out by social media personality Lasizwe Dambuza where he raised two million rand to help struggling South African students with their fees. Crowdfunding is enabled by digital communities of like-minded people. Essentially, successful crowdfunding
gives an entrepreneur small amounts of start-up funding from many interested individuals. Crowdfunding needs a great deal of excellent strategies and specification from the people carrying it out. For instance, if one needs ten thousand rands, you need to clearly put it out there you need that certain amount. In most cases, crowdfunding uses scratch-your-back, scratch-mine approach. Investors tend to demand some shares for your business return.
Microfinance
Microfinance provides low-income and unemployed people with small business finance in the form of small, safe, and ethically managed loans. B2B copywriter, Charlotte Danby, describes as a more inclusive form of traditional bank loans, which acknowledges the growing number of South Africa’s necessity-driven entrepreneurs who cannot access standard financial services or support. This is one of the advisable routes small business owners can take advantage of in these trying times of COVID-19 pandemic.
Market your business anywhere
There are a lot of powerful digital tools small business owners can employ to market for their business for sponsorships. On Saturday, we witnessed businessman and South African rapper Cassper Nyovest whose real name is Refiloe Phoolo promoted his own brand at celebrity boxing match with South African actor and musician Anga
Makubalo, known to all as Naak Musiq. Promoting the brand to potential investors is not a bed of roses, one needs loads of patience. Promoting your brand in events could help business owners earn feedback from people who went through the same route. It also comes in handy in boasting the confidence of the small business owners. With requisite will and positive entrepreneurial spirit, any mountain can be surmounted.
Department of Small Business Development (DSBD)
Over the years, Department of Small Business Development trained informal traders, established 29 satellite offices and five centres of business excellence. The department’s mandate is the promotion and development of sustainable and competitive entrepreneurs, small businesses and co-operatives that contribute to job creation and economic growth. In order for your small business to get funding from the department, your business needs to strictly meet the criteria set by the department and its agencies. Below are the agencies small business owners can approach for funding opportunities of their small businesses:
SEFA
Established in 2012, the Small Enterprise Finance Agency (SEFA) helps start-ups and small businesses. They will either fund grants or loans or help entrepreneurs access funding from other sources. SEFA services are designed to help micro, small and medium-sized business enterprises. Co-operatives and survivalist enterprises that need help to grow are especially encouraged to seek assistance. Loans from SEFA can range from as little as R500 up to R3 million, with the loans paid directly to owners. This direct payment is important in a business sector that is
often not part of the traditional banking system. Micro, small and medium enterprises and co-operatives with a viable business plan can apply for a loan. SEFA staff will evaluate the application to determine the viability of the loan, and at what rate it can be repaid without damaging the company.
E-mail: helpline@sefa.org.za(link sends e-mail)
Call centre: 086 000 7332
Website: http://www.sefa.org.za/