Funding instruments include terms loans, bridging finance ,asset finance and revolving facilities (delete debt finance because it refers to term loans which is a repetition)
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
- 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