New startup fund to help with development of small enterprises
Small businesses are currently seeing an increase in funding and support opportunities from both the private and public sectors.
Royal Fields Finance, a financial services group focusing on funding small and medium enterprises yesterday launched a one-stop shop enterprise development programme worth R100 million to support SMEs, in partnership with the government agency, the Jobs Fund.
Royal Fields Finanace specialises in offering short-term loans to SMEs that have won tenders but don’t have the working capital to fulfil them. It’s partnership with the Jobs Fund, will see it expand its services to administering a separate interest-free programme.
The R100 million enterprise development programme
The enterprise development programme is designed to assist SME businesses to improve enterprise performance, achieve operational and financial self-sufficiency, grow and create value and jobs.
“Unlike traditional funding institutions, Royal Fields Finance provides in many instances 100% funding to SMEs, without requiring risk capital contributions”
Broker turns into financier
Royal Fields Finance is a private company that provides specialised short-term funding to SMEs and start-up ventures. The company is 95% black-owned, having been founded by CEO Mncedisi Xego in 2009.
Xego is a former Rand Merchant Bank deal-broker who previously worked on multi-billion rand BEE contracts. He has extensive experience in tax law and in civil service.
Unlike traditional funding institutions, Royal Fields Finance provides 100% funding to SMEs, without requiring risk capital contributions.
Helping the small guys play in big field
The company focuses on SMEs that are unable to raise funding from banks and other traditional funding institutions due to lack of trading history, security and risk capital.
It provides short-term loans of values between R70 000 and R2.5 million, funding businesses across a wide array of different sectors. It does this by providing funding at quick turnaround times of 10 to 14 days.
According to Xego, this fund aims “to give SMEs a foot in the mainstream door, create financial and credit history, build capital base, and transfer skills”.
Since its establishment, the company has provided loans with an aggregate value of R200m to over 170 SMEs, covering over 300 projects, of which 98% were completed successfully, creating over 1000 jobs in the past three years.
To ensure that the money loaned is used correctly, the programme also offers other services that include an entrepreneurship course at the University of Witwatersrand; mentoring and coaching; networking opportunities; financial planning and financial management; assistance with regulatory and legal compliance; and links to strategic partners.