Funding checklist for South African businesses


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Securing funding for your business requires the 3 Ps - careful planning, preparation and presentation. Investors meet with thousands of entrepreneurs and only sign deals with a few of them, not because there isn’t any money, but because the applicants fail to convince them that they and their business have what it takes.

Your pitch is crucial to obtaining funding.

If you work on the assumption that you’re probably going to get a whole lot of no’s before you get a yes, then you can save yourself a lot of heartache. It’s a learning process and every refusal gets you closer to your funding goal.

Use this checklist to ensure you enhance your chances of success when seeking financial support.


1. Business plan

Develop a comprehensive business plan outlining your business model, objectives, and financial projections. Include details about how the funds will be utilised and most importantly, show how and when the business will be able to meet its financial obligations.


2. Determine funding or financing needs

Calculate the exact amount of funding you need. Be precise about how the funds will be used, whether for startup costs, expansion, working capital, or other purposes. Statements such as “I need R5 million” are a red flag, especially when this is not supported by detailed forecasts. Investors want to know their money will be well-spent.


3. Credit score check

Check your personal and business credit scores. A strong credit history can improve your chances of securing funding. Bankers and state funding institutions are especially interested in your financial responsibility. (If your score is low, try to address the outstanding debts and arrange for acknowledgment of debt letters. This indicates that you are taking steps to remediate.)


4. Legal structure

Ensure your business has the appropriate legal structure (e.g., Pty Ltd, Sole Proprietorship). This can affect the types of funding you're eligible for. Investors and formal lending institutions will generally require a registered business and a business bank account.)


5. Financial statements

Prepare financial statements, including balance sheets, income statements, and cash flow projections. Keep them up-to-date and accurate. Depending on the nature of your business and the amount you are seeking, a simple bank statement and excel spreadsheets may be acceptable. For more sophisticated and established businesses, audited accounts may be required.


6. Collateral

Determine if you have assets or collateral to secure a loan if needed. This is crucial for certain types of funding.


7. Research funding options

Explore various funding sources available, including banks, government grants, angel investors, venture capitalists, crowdfunding, and private lenders. Be realistic and start small, a successful track record of small-scale lending and repayment will build your credibility and investment attractiveness.


8. Business pitch

Craft a compelling business pitch or elevator pitch that concisely explains your business, its unique selling points, and why it's a sound investment.


9. Networking

Build a network of potential investors, mentors, and advisors. Attend industry events and join business associations. A chance conversation with the right person at the right time may just open the right door.

Have an elevator pitch ready for any occasion. In less than 30 seconds, describe:

  • What is the need or the problem
  • What is your solution
  • What is your core value proposition


10. Grant eligibility

To access grant money, you’ll need to submit all the right paperwork, in the right format at the right time, so do your homework! Your business must be aligned with a specific industry or purpose (this is listed on the agency or department’s website).

Because grants do not need to be repaid, there are strict guidelines for applications and the process is lengthy.

(Investigate options such as: Department of Trade and Industry, National Youth Development Agency, Small Enterprise Finance Agency, Isivande Women's Fund, South African Micro Finance Apex Fund, The Umsobomvu Youth Fund)



11. Pitch presentation

If approaching investors, venture capitalists or banks, create a professional pitch presentation. Highlight your business's potential for growth and profitability, as well as its ability to meet all financial obligations.

The presentation must be easy to read, and professional and it should reflect your brand. Ensure there are no grammatical errors and that the numbers make sense. If you are going to deliver the presentation, practice so that you can speak confidently.

Do your research on each investor you’re about to meet. What type of businesses do they invest in? What do they look for in a business? What are their success stories.


12. Due diligence

Be prepared for investors or lenders to conduct due diligence on your business. Have all necessary documents and information readily available. Keep a secure, up-to-date folder of all essential documents (accounts and compliance certificates, plus all support documentation such as director IDs and proof of bank accounts.)


13. Legal and tax compliance

Ensure your business is compliant with all relevant South African laws and tax regulations. Non-compliance can be an own goal. This includes any industry-specific compliance such as food safety.

If your business relies on unique intellectual property, take steps to protect it through patents, copyrights, or trademarks.


14. Financial projections

Present realistic financial projections and growth potential. Provide evidence of market demand for your product or service. These must be detailed and data-driven.


15. Review and revise

Continuously review and revise your funding strategy based on feedback and changing circumstances.


16. Seek professional advice

Consider consulting with financial advisors, attorneys, or accountants experienced in business financing to guide you through the process.


Remember that securing funding or financing can be a lengthy process, and rejection is likely. Stay persistent and flexible, adapting your approach based on feedback and changing market conditions.

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