THE NEF APPLICATION FORM

R250 000 - R75 million

 THE NEF APPLICATION FORM
R250 000 - R75 million
Please complete this application in full with all the required information, including a comprehensive business plan proposal and the required
financials as described below. Where the information requested is not applicable please write “Not Applicable” or “N/A”. Incomplete
applications will not be accepted. All business plan proposals declined by the NEF or withdrawn by the applicant, will not be kept on our
records, please do not submit master/original documents. THIS FORM IS FREE AND NO FEES ARE PAYABLE TO THE NEF OR ANY OTHER
PERSONS FOR THE COMPLETION OR ASSISTANCE WITH THIS APPLICATION FORM. To view the electronic format please visit: www.nefcorp.co.za

Applicant details
Name: Surname:

Identity number:
Residential address:

Postal address:

Telephone: Cellphone:
Fax: E-mail:
BEE classification A C I W

BUSINESS details

Name of business: Finance required: (Rands)

Physical address
and province: Stage of business: Start-up/new:
Postal address: Existing:

Years in existence:
Business tel. number:
Business fax. number: Type of industry:

Rural Urban Peri-Urban Key contact person:

Business Location: Key contact

person’s number:

SHAREHOLDERS/MEMBERS OF THE COMPANY/CC

Shareholding % Shareholding %
Name *BEE/Non-BEE Male/Female Contribution
(Pre-NEF funding) (Post-NEF funding)

TOTAL

* “Black people” are, African, Coloured and Indian natural persons who are citizens of the Republic of South Africa by birth or by descent
as well as natural persons who acquired citizenship by naturalisation prior to 27 April 1994.

FOR OFFICE USE ONLY

Date of
original application: D D M M Y Y Y Y Resubmission

Reference number:
Product type: Entrepreneurship finance Franchise finance Acquisition finance
Procurement finance Rural and community development Project finance
Expansion capital Strategic project fund

The NEF will not consider applications that do not comply with all current RSA legislation pertaining to the operations of a business,
including but not limited to, all tax and corporate governance laws/principles. Where appropriate the NEF may report such cases
to the relevant authorities.
BEE PARTICIPATION IN: Current Future
Shareholding/ownership (%)
Management (%)
BEE Non-BEE
Details Male Female Total Male Female Total Grand Totals
Senior Management
Non-Managerial Staff
Temporary Staff
Grand Totals

BEE Non-BEE

BEE Non-BEE

BEE Non-BEE

BEE Non-BEE
 DOCUMENT AND INFORMATION CHECKLIST

Please provide us with the applicable documents as outlined below;

Existing Start-up
Business Business

1 Application form and Business plan • •

2 Affidavit from members or directors that they are aware of the contents of the application form •

3 Three (3) year audited financials (Income Statement, Balance Sheet, Cash Flow Statement) •

Five (5) year financial projections (Income Statement, Balance Sheet and monthly Cash Flow
4 • •
Statement) with first year prepared on a monthly basis

5 Recent management accounts (Income Statement and Balance Sheet) •

Personal Statements of Assets and Liabilities of all the members or directors including those
6 • •
of spouses if person is married in Community of Property

7 Business bank statements for the past twelve (12) months •

8 Certified ID copies of all members or directors • •

9 Registration Documents and all the relevant legal documents relevant to the entity • •

10 Detailed profile of the Franchisor • •

11 Details of why the business is for sale •

12 Sale Agreement •

13 Franchise Agreement • •

14 Historical financials of other franchises that are similar in size and in similar locations • •

15 Indication from the Franchisor of how much a new Franchise in a similar location would cost • •

Indication of whether the lease agreement will be ceded to the new company after the sale or a
16 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.

17 The prospective buyer must have been approved by the franchisor •

18 Fica compliance - Proof of residence • •

19 Detailed CV of principle Applicant • •

 HISTORICAL PROJECTED/FORECAST
Year-3 Year-2 Year-1 Year-1 Year-2 Year-3 Year-4 Year-5
Sales in units
Sales in Rands
Less: Cost of sales
Raw material a
Raw material b
Direct labour
Gross profit
Less: Operating expenses
Accounting and auditing fees
Advertising
Depreciation
Distribution cost
Equipment leases
Insurance
Interest
Motor vehicle expenses
Office expenses
Other expenses
Printing and stationery
Rental, electricity, water
Salaries and wages
Directors’ salaries
Security costs
Telephone
Income/(loss) before tax
Income tax
Income/(loss) after tax

HISTORICAL PROJECTED/FORECAST
Year-3 Year-2 Year-1 Year-1 Year-2 Year-3 Year-4 Year-5
ASSETS
Fixed assets
Land and buildings
Motor vehicles
Furniture and fitting
Machinery and equipment
Other
Current assets
Debtors
Stock
Cash surplus/(deficit)
Total assets
EQUITIES AND LIABILITIES
Capital and reserves
Share capital
Shareholders’ loan
Retained income
 HISTORICAL PROJECTED/FORECAST
Year-3 Year-2 Year-1 Year-1 Year-2 Year-3 Year-4 Year-5
Non-current liabilities
Term loan
Other loan
Current liabilities
Creditors
Bank overdraft loan
Total equity and liabilities
Debtors’ days
Creditors’ days

CASH FLOWS HISTORICAL PROJECTED/FORECAST

FROM OPERATING ACTIVITIES Year-3 Year-2 Year-1 Year-1 Year-2 Year-3 Year-4 Year-5
Net profit before taxation
Adjustments for:
Depreciation, amortisation
Interest paid
Interest received
(Increase)/decrease in debtors
Increase/(decrease) in creditors
(Increase)/decrease in stock
Cash generated from operations
Interest paid
Dividends paid
Preference dividends (paid)
Income taxes paid
Net cash from operating activities
CASH FLOWS FROM OPERATING ACTIVITIES
Capital expenditure
Interest received
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds on issue of shares
Proceeds on disposal of fixed assets
Holding company loan
Preference shares
Nedbank long-term loan
Net cash used in investing activities
Net change in cash
Cash equivalent at beginning of period
Cash equivalent at end of period
RATIOS
Gross margin
Net margin
Current ratio
Debtors’ days
Creditors’ days
Stock days
Debt to equity ratio
Interest cover
How to reach the National Empowerment Fund

Head Office
Gauteng Province
West Block, 187 Rivonia Road, Morningside 2057, PO Box 31, Melrose Arch, Melrose North 2076
Tel: +27 (11) 305 8000 | Fax: +27 (11) 305 8001 | Call Centre: 0861 843 633 | 0861 (THE NEF)
applications@nefcorp.co.za (Funding) | info@nefcorp.co.za (General Enquiries)

Eastern Cape Province

7b Derby Road, Berea, East London 5241
Tel: 0861 NEF ECP (0861 633 327) | easterncape@nefcorp.co.za

Free State Province

34 Fountain Towers, Corner Zastron and Markgraaf Street, Westdene, Bloemfontein, 9300
Tel: 0861 NEF FSP (0861 633 377) | freestate@nefcorp.co.za

KwaZulu-Natal Province
Smart X - Change Building, 5 Walnut Road, Durban, 4001
Tel: 0861 NEF KZN (0861 633 596) | kzn@nefcorp.co.za

Limpopo Province
Suite 8, Biccard Park, 43 Biccard Street, Polokwane 0699
Tel: 0861 NEF LIM (0861 633 546) | limpopo@nefcorp.co.za

Mpumalanga Province
Trust Building, 16 Brander Street, Nelspruit, 1200
Tel: 0861 NEF MPU (0861 633 678) | 013 754 9860 | mpumalanga@nefcorp.co.za

North West Province

32b Heystek Street, Sunetco Office Park, Ground Floor, Rustenburg, 0299
Tel: 0861 NEF NWP (0861 633 697) | northwest@nefcorp.co.za

Western Cape Province

Suite 2818, 28th Floor, ABSA Centre, 2 Riebeek Street, Cape Town 8001
Tel: 0861 NEF WCP (0861 633 927) | westerncape@nefcorp.co.za
Limpopo

Mpumalanga

Gauteng
North West

Free State KwaZulu-Natal

Northern Cape

Eastern Cape

Western Cape

Northern Cape Provincial office to open soon.

STOP Fraud, Corruption and Theft

Contact Tip-Offs Anonymous on 0800 212 705 or email nef@tip-offs.com
If you suspect any irregularity in the application process

National Empowerment Fund Trust (established by Act 105 of 1998) IT: 10145/00. A member of the dti group | www.nefcorp.co.za | www.nefbusinessplanner.co.za

Page 7
Documents Required for NEF:

1. Company Incorporation Documents.

2. Certified ID copies of all Directors.

3. Financial statements for the past year.

4. Personal statements of assets and liabilities of Directors.

5. Business bank statements for the past 12 months.

6. Proof of Residence of Company (For FICA compliance).

7. Detailed CV of principal applicant.

8. Appointment letter of Accounting officer.

9. B-BBEE Certificate.

10. Tax Clearance Certificate.

 NEF FUNDING PRODUCTS

NEF funding is currently obtainable from four funds. These are:

1. iMbewu Fund
2. uMnotho Fund
3. Rural and Community Development
Fund
4. Strategic Projects Fund

Funding Criteria
The NEF provides funds to black entrepreneurs and groups with the aim of facilitating access to finance in support of Broad-Based
BEE in terms of government legislation. The investment activities of the NEF are guided by an investment policy that seeks to
ensure that investments create real economic empowerment for black people without deviating from sound economic principles.

Each application for funding is assessed in terms of the following criteria:

 Commercial viability of the business case being presented

 The business must comply with all relevant laws and regulations

 There must be operational involvement at the managerial and board levels by black people

 Minimum percentage of black ownership or interest of 50.1% is a requirement

 The business must be able to repay NEF funding

 The business must create a reasonable number of jobs

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  Geographic location of the business is also important with the focus on rural or economically depressed areas encouraged

 Meaningful black women participation is viewed more favourably

 Rural and Community Development Projects must have meaningful participation by communities

 Possibility of co-funding with private or public sector institutions is encouraged in larger projects.

Once your application has been received and found to meet the above conditions, it will then go through different stages for a
detailed commercial assessment.

Non-financial business support

a. Pre-Investment Unit (PIU)
Applicants for funding may be excellent entrepreneurs, but often struggle to navigate the necessary application procedures and to
manage their businesses. The NEF therefore assists with funding advice, business planning and general assistance to help ensure
that applications are of sufficient quality to complete all steps in the application process.

The first point of contact for many potential clients, the PIU’s primary functions are to:

 Information on NEF funding & Non-funding solutions

 Provide guidance in drawing up funding applications

 Identify applications which meet the NEF’s funding criteria

 Keep clients informed on the progress of their applications

 Advise applicants on qualifying criteria and application process

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b. Post-Investment Business Support Unit (POIU)
Black businesses need to be robust and self-sustaining for BB-BEE to succeed. Recognising this fact, the NEF established
structures to monitor its clients for risk and provide advice when needed. Although start-ups are inherently higher risk, the rewards
for success are jobs and increased capital for further start-ups.

The unit is responsible for:

 Regular portfolio monitoring

 Regular collections management and credit control

 Mini restructure of distressed investments

 Turnaround and rescue of highly distressed investments

 Legal and workouts

 Active board seats on larger investments

 Mentorship and technical assistance

 Valuations of investee companies

 Impairments of investments; bad debt write off

 Legal Compliance

 Portfolio Management

 Portfolio Risk Management

 Additional funding on existing investments

 Exits on matured investments

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  Knowledge Management

 IT system development

To provide a superior customer relationship management channel for all NEF’s Investees

iMbewu Fund
This 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.

Funding is delivered through the following products:

1. Entrepreneurship Finance
2. Procurement Finance
3. Franchise Finance

1. Entrepreneurship Finance

The Entrepreneurship Finance product is aimed at providing startup and expansion capital to new and early-stage businesses that
are owned and managed by black people.

The key criteria of this product are:

 BEE applicants should be actively involved in the day-to-day management of the business

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  Minimum black ownership of 50.1% is a requirement

 Business and/or industry experience by black entrepreneurs is also considered

 The NEF reserves the right to oblige applicants to participate in the NEF mentorship programme where there is lack of
business and/or Industry experience

 The business should be able to repay NEF’s investment

 Funding Instruments include term-loans, shares and other structures with ordinary share characteristics

 NEF funding is charged at prime linked interest rates

 Business must have a clear value-add with a sound business case

 Maximum NEF funding is R10 million

 The NEF will exit from the investment in 5 to 7 years

2. Procurement Finance

The Procurement Finance product is aimed at assisting black-owned SMEs that have been awarded tenders or contracts by public
and private sector entities. The product’s main objective is to ensure that qualifying SMEs have the capacity to carry out the
contracts.
The key criteria of this product are:

 The term of the loan will match the duration of the contract.

 NEF funding is generally limited to R10 million

 There must be active participation by black individuals in the operations of the business

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  Minimum black ownership of 50.1% is required

 Industry knowledge by management or there must be clear transfer of skills through relevant partnerships

 Funding instruments include term-loans, bridging finance, asset finance, revolving facilities and debt finance

 NEF will fund both the acquisition of assets and the working capital requirements of the business

 NEF funding is charged at prime linked interest rates

 The NEF reserves the right to oblige applicant to participate in the NEF mentorship programme

 NEF will support contracts awarded by reputable entities

 NEF does not generally support subcontracts especially those awarded by agents and entities that have a weak financial
position and lacking track record

 The contract must be commercially viable and generate sufficient profits and cash flow to repay NEF’s loan

3. Franchise Finance
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.

The key criteria of this product are:

 The NEF prefers to fund well established franchise concepts

 Active management involvement by BEE parties is required

 Minimum BEE shareholding of 50.1% is a requirement

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 NEF funding of franchises is through a loan instrument with the term matching the duration of the franchise license, however,
up to a maximum term 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

 NEF funding is charged at prime linked interest rates

 The NEF will exit from the investment in 5 to 7 years.



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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.

Funding ranges from R2 million to R50 million and details of the five products are provided below:
1. Acquisition Finance
2. New Venture Finance
3. Expansion Capital
4. Capital Markets
5. Liquidity and
Warehousing

1. Acquisition Finance
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

8
  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

9
  The NEF investment horizon is 5 to 10 years

 Security to include personal guarantees

3. Expansion Capital
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

4. Capital Markets

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.

5. Liquidity and Warehousing

10
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.

Rural and Community Development Fund

Rural and Community Development Fund was designed to promote sustainable change in social and economic relations and
supporting the goals of growth and development in the rural economy, through financing of sustainable enterprises. This would be
achieved through the mobilisation of rural communities in legal entities or cooperatives, in order to participate in the broader
economic activities and realise the economic transformation goals in rural South Africa. The fund has three products: Acquisition
Finance, Expansion Capital and Project Finance (New Venture/Start-up/Greenfields) with the funding threshold ranging from a
minimum of R1 million to R50 million.

Sectors funded:

11
The key criteria of this product are:

 Projects must be financially sustainable

 BEE applicants should be actively involved in the day-to-day operations of the business

 Technical partners should be actively involved in the day-to-day operations of the business

 The NEF will invest using debt, equity and quasi-equity instruments

 Minimum black ownership of 25.1% is a requirement

 Joint ventures between black and non-black partners to support skills transfer

 The business should be able to repay NEF’s investment

 The business must have a clear value-add with a sustainable business case

 The NEF will exit from the investment in 5 to 10 years

 The NEF reserves the right to oblige applicants to participate in the NEF mentorship programme

Rural and Community Development Fund offers the following financing products:
1. Acquisition
2. New Venture Capital
3. Expansion Capital

1. Acquisition

12
This product was designed to cater for rural entrepreneurs or communities seeking to buy equity in existing rural and community
enterprises focusing on small to large ventures where partnerships between NEF, BEE parties or community entity and technical
partner is involved.

2. New Venture Capital

New Venture Capital product is aimed at assisting rural entrepreneurs and co-operatives and communities with equity contribution
towards establishment of sustainable new ventures in Agri-sector including forestry, tourism, processing, etc. Medium sized new
venture projects with total funding requirements of between R1m and R50m.

3. Expansion Capital
This product facilitates involvement and ownership by communities in projects promoting social upliftment of rural and community
projects using entities such as co-operatives and private companies.

Strategic Projects Fund

 A unit of the NEF established with a mandate to increase the participation of black people in early-stage projects.
 Aligned to national Government policy.
 Seeks competitive opportunity for the South African economy and the inclusion of black participation in opportunities at the
outset of projects, as opposed to doing so during equity closure.

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SPF's sector focus is informed by the government's strategies on industrial development through the dti's National
Industrial Policy Framework, the corresponding Industrial Policy Action Plans [IPAP] as well as the current government
economic growth strategy, the New Growth Path. The sectors identified based on the IPAP and the New Growth Path and
are listed as follows:

 Agriculture;

 Business Process Outsourcing [Call centres, data storage centres and termination centres];

 Textiles

 Mining, Mineral Processing and Mineral Beneficiation;

 Automobiles

 Renewable Energy and Biofuels [solar, biomass, hydro, co-gen and wind];

 Plastics;

 Pharmaceuticals and Chemicals

 Forestry, Pulp and Paper;

 Infrastructure [telcoms, healthcare, roads, rail airports, dams and water];

 Manufacturing;

 Tourism [hotels, resorts, tourism attractions and leisure];

The list above is a guideline, and SPF will evaluate each project based on its economic merit and ability to deliver on the
Development Mandate.

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In the quest to expedite BB-BEE participation not only in small and medium enterprises and existing businesses through
acquisition of equity interest in well established businesses but also participation in new sector industries which have been
built from the ground, the NEF established the Strategic Projects Fund (SPF).
The SPF is at the centre of NEF’s investment strategy when it comes to securing the participation of black people in early stage
projects. Its core function is to provide Venture Capital Finance aimed at developing South Africa’s new and strategic industrial
capacity within strategic sectors identified by government as key drivers to economic growth.
It all began with a simple strategic question; “How is the NEF going to secure the participation and empowerment of black people in
strategic sector projects that are at an early stage?” This required NEF to develop a fund that would become a pioneer in providing
Venture Capital Finance that would seek to provide seed capital for feasibility studies.

This fund would embody NEF’s truest sense of achieving its developmental finance objectives, most importantly securing
the participation of black people.
To date that question is being answered and the NEF through SPF takes a leading role and has become the face of BB-BEE in
future strategic companies. Established in 2008 as a division within the NEF, the SPF’s mandate is to play a central role in early
15
stage projects by identifying, initiating, scoping and developing projects that are in sectors identified by government as key drivers
to South Africa’s economic growth. These projects will be taken through 6-stages of project development.
The phases being the following: Scoping and Concept Study; Pre-Feasibility Study; Bankable Feasibility Study; Financial Closure;
Construction Phase; and Technical Completion.

16
17
Strategic Projects Fund - Development and Economic Impact

 Creation of new manufacturing and industrial capacity

 Creation of new jobs as opposed replacement capital finance

 Investment of new fixed capital into economically depressed areas or poverty

nodes

 Creation of an inclusive economy by increasing black South African

participation in early-stage projects

 Increase RSA export-earning potential and reduce import dependency

 Increase co-investment and linkages with foreign direct investors

1 2

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