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Helping you start and build your small business empire

Financing FAQ

Frequently asked questions about how to finance your small business in South Africa.

Answers to these questions will be published shortly

Q - Where can I find finance to start my business?

Q - I have  a brilliant idea and need R500 000 to start my business. Where can I find such an investor?

Q - I have tried the banks, investors, friends and family and still cannot get a loan to start my business. What can I do?

Q - The bank wants me to use my house as security for my business loan. Is this normal?

Q - I have R50 000 in my savings account at the bank and want to start a business. The bank has said that I should leave it there to earn interest and use it as security for a R50 000  business loan. Do you agree?

Q - There is no help for small businesses in South Africa. I have a business plan and have tried everywhere to get a loan, but no one will give me any money.

 

Q - Where can I find finance to start my business?

A - It is necessary to understand that for most people, it is practically impossible to convince someone to just give them money. There are businesses out there that will lend you cash as long as you have assets which they can take in case you don’t pay. Most small business start ups are not in the fortunate position of having unencumbered assets. Instead they have to find someone to give them money based on promises of future profits. This is where your argument has to be compelling. Normally it takes the form of a business plan which needs to convince  the investor that you have the right skills, product and personality to turn the idea into a profitable business. Note that this type of investor will generally require a considerable portion of any future profits which can be painful when its the entrepreneur who seems to be doing all the work.

The most common form of finance is the scraping together of funds by the various owners (if there are more than one) of the business and then trying to fund the business out of early profits. In short, finding finance for a business is a major challenge and there is no easy answer to this very frequently asked question. More discussion and information on this topic is available at our finance section and under common problem no.1.

Q - I have  a brilliant idea and need R500 000 to start my business. Where can I find such an investor?

A - Your idea is going to have to be very, very convincing to get this type of finance which would likely have to come from some form of venture capital. As a long shot you can list it on the GoBigNetwork in the hope that an angel investor is attracted to your idea. Before contacting the local venture capital companies, you will need to have your business plan in order. Your best bet though is to re look at how you came to that large figure of money required to get your business going. Start slashing costs, change your strategy slightly, narrow your target market, do whatever it takes to get your business off on a much lower budget.

Q - I have tried the banks, investors, friends and family and still cannot get a loan to start my business. What can I do?

Q - The bank wants me to use my house as security for my business loan. Is this normal?

Q - I have R50 000 in my savings account at the bank and want to start a business. The bank has said that I should leave it there to earn interest and use it as security for a R50 000  business loan. Do you agree?

Q - There is no help for small businesses in South Africa. I have a business plan and have tried everywhere to get a loan, but no one will give me any money.

 

The subject matter dealt with on this site is of a general nature only. It is always advisable to consult a professional for your specific situation. All information provided on this site has been carefully chosen and is to the best of our knowledge correct and current. If however you find errors, broken links or disagree with facts provided, please contact us at webmaster1@bizempire.co.za so that we can make the correction and provide South African business owners with relevant and error free factual information. If you believe there is relevant content missing and you wish to add this value to the site, then you can contact us at the same address

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