BUSINESS HI-LITE Page 30
NATIONAL EMPOWERMENT FUND Growing Black Economic Participation
The National Empowerment Fund is a development finance institution set up by the Department of Trade and Industry to support Broad-Based Black Economic Empowerment. Here are 10 things you MUST know about the NEF and how it could assist you and your business.
Does the NEF assist with finding empowerment partners for non-BEE compliant businesses interested in obtaining funding? The NEF assists BEE parties with management buy-ins and/ or management by-outs of white owned companies and sectors but does not find the empowerment parties for the non-BEE compliant businesses.
Does the NEF only fund black people? The NEF criteria stipulates the thresholds for each product category with a minimum requirement of at least equity holding in the case of Corporate Fund Products and increasing to 50.1% in the case of 25.1% Imbewu Fund Products.
What is the difference between debt and equity funding? Equity funding is when the NEF as a financier takes a share interest in your business.The applicant would buy these shares back at a later stage. Debt funding is in the form of a loan and repaid with interest over the investment period.
What is the difference between grant and loan funding? Grant funding or portions thereof do not have to be repaid whereas loan funding is paid back with interest. Grant funding would not be provided by the NEF and would normally apply to non-profit activities.
Will the NEF fund franchises? Yes, if all franchising requirements as supplied by the franchisor are met, our funding application processes can be followed by the applicant.