uMnotho Fund

This Fund is designed to improve access to BEE capital and has five products:

Acquisition Finance, Project Finance, Expansion Finance, Capital Markets Fund, and Liquidity and Warehousing. These products provide capital to black-owned and managed enterprises, black entrepreneurs who are buying equity shares in established black and white owned enterprises, starting new ventures, expanding existing businesses and BEE businesses that are or wish to be listed on the JSE.

The key criteria of this product are:

• BEE applicants seeking to fund equity purchases of between R2 million and R75 million in existing businesses
• Focus on medium to large companies
• Focus on partnerships with existing management teams and other equity investors
• Minimum BEE ownership of 25.1% post NEF investment
• Active BEE management participation
• Active BEE involvement in investee companies
• BEE Financial contribution determined on case-by-case basis
• Investment instruments can include a combination of debt, equity and mezzanine finance
• The NEF reserves the right to oblige applicants to participate in the NEF mentorship programme
• Typical investment horizon of 4 to 7 years
• Security to include personal guarantee

2. NEW VENTURE FINANCE

This product provides capital of R5 million to R25 million per project for BEE parties seeking to participate in medium-sized greenfields projects with total funding requests of between R10 million and R200 million.

The key criteria of this product are:

• Minimum 25.1% BEE shareholding
• Investment instruments can include a combination of debt, equity and mezzanine finance in support of BEE
• BEE-specific financial contribution assessed on a case-by-case basis
• NEF exposure to the project generally not to exceed 50% of total project costs
• Proven management experience within consortium
• Active BEE involvement in investee companies
• Debt funding raised from the market to match equity funding provided by NEF and other project sponsors
• The NEF investment horizon is 5 to 10 years
• Security to include personal guarantees

The NEF will provide funding of R5 million to R75 million to entities that are already black-empowered, but seek expansion capital to grow the business.

The key criteria of this product are:

• Investment instruments can include a combination of debt, equity and mezzanine finance in support of BEE
• BEE shareholding should be minimum of 50.1%
• Pricing based on instrument, risk matrix, security package, etc.
• Typical investment horizon of 4 to 7 years
• Active BEE involvement in investee companies
• Security to include personal guarantee and security over business assets

This product invests in BEE enterprises, particularly those owned by black women that seek to list on the JSE or its junior AltX market. The Umnotho Fund will also help listed BEE companies to raise additional capital for expansion.

All other key features are similar to those of the Acquisition Finance product.

This product assists BEE shareholders who need to sell a portion or all of their shares (as minority stakes in unlisted firms are hard to sell). Also acquires and temporarily warehouses these shares before on-selling them to new BEE shareholders, and refinances BEE shareholdings where existing financing structures are costly and/or inefficient.

All other key features are similar to the Acquisition Finance Fund.

How to apply for funding: click here 

Source: www.nefcorp.co.za