How do I finance my business? Louis Nhlapo & Catherine Young

Meet Catherine Young | ‏@CatherineHYoung Owner – Thinkroom Consulting SME development across all industries and sectors SME development strategies for corporate organisations Background Corporate companies: Shoprite, Chevron, Deloitte, Ariba Twenty years experience in various positions held relating to supplier and small business development

Meet Louis Nhlapo | @Seda_thedti ‏ Programme Manager- EMPRETEC Seda, agency of Department of Trade & Industry Specialising in Small Enterprise Development Seda has been in existence for 10 years 43 Branches nationally My background At Seda since inception Previously experience in Franchising Golfer & Off-road driving

Access to finance is viewed as one of the biggest constraints for any business, whether start-up or existing.

Potential sources of SME funding Financial institutions: Banks Finance Houses Small Business Loans Institutions Venture Capital Funding outside financial institutions: Self-funding always best Investors Friends, family - and “fools” Partners Angel funds Crowd-funding

Getting prepared for funding discussions Keep track of what your business is doing Keep calm about what needs to be done Monitor how well you are getting things done Improve your ability to do things right the first time

Bank requirements for SMEs asking for loans Strong evidence of business viability going forward Your own fund contribution (“skin in the game”) Solid understanding of your own business plan Viable cashflow and balance sheet; management capabilities; collateral offered; healthy business margins

Reasons why banks refuse loans Startups are risky to finance Inability of the startup to offer collateral Un-bankable business plans SME’s not competent enough Lack of owner commitment Inadequate information provided Difficulty to determine the risk involved

Checklist for a presentation to bankers Bank finance required (why, how much) Current trading History and background of the business Contingencies and litigation Share capital and articles Profit projections Key personnel New projects Business (nature, market, competitors) Cash forecast Management information and accounting Borrowings Accounting policies Security Trading results Monitoring Taxation