Fund helps female entrepreneurs start businesses

Obtaining funding for a business or even a start-up isn’t easy. You can always apply for a bank loan but banks have their own rules and regulations and they’re not always willing to back businesses that have a lot of risk attached to them. Angelique Ruzicka talks to Business Partners Ltd about their new Women in Business Fund that is set to give a financial leg-up to women who dream of starting their own businesses in South Africa.

If you’re a women keen on starting a business there’s another way to get a loan. Business Partners Limited (Business/Partners) have this week launched a R250 million Women in Business Fund at its annual Women’s Month seminar. Aimed at increasing access to finance for female entrepreneurs, the Fund seeks to afford South African women a fair and equal opportunity to start, expand or purchase an existing business.

The Fund will offer finance between the value of R500 000 and R50 million per investment over a five year financing period. All businesses that are commercially viable will be considered for financing, but they need to have active female owners with at least a 50% stake in the business.

Anton Roelofse, regional general manager at Business Partners Ltd said that business loans given to female entrepreneurs will have market related interest rates attached (usually prime plus one percent). However, he added that Business Partners could charge additional fees for risks incurred. So if, for example, your business is risky you could be charged more interest.

Women in business stats

Nazeem Martin, managing director at Business/Partners says that the company has, over the past seven years, funded women entrepreneurs. 35% to 45% of all new business concluded over this period was with women entrepreneurs. The company aims to increase this figure to 50% in the near future. “The Women in Business Fund will play a key role enabling Business/Partners to reach this goal and achieve an even split between male and female business owners being financed and on our book.”

He continues: “Two decades since South Africans officially started celebrating the ideal of gender equality in the form of Women’s Month, the number of women who enter and succeed in entrepreneurship is still disappointing. South Africa is no exception to the world-wide phenomenon that women, who represent more than half of the population, are still in the minority when it comes to entrepreneurship.”

Martin adds that research worldwide shows that when it comes to power entrepreneurship – high-growth, substantial businesses – female entrepreneurs are even more of a minority. “In the US, for example, only one in five businesses with a turnover of more than $1m (R12.98 million) are owned by women. In Europe, only 8.3% of patents awarded are awarded to female owned businesses. There is little to suggest that the picture is any less skewed in South Africa. If anything, the situation has probably deteriorated recently given the latest Global Entrepreneurship Monitor showed that only 6.2% of South African adult women are involved in entrepreneurship, down from 9% a year earlier.”

Martin highlighted some reasons for the lack of female leadership in South African businesses. “Deep-seated cultural legacies discouraging women from choosing entrepreneurship added to family responsibilities have proven to be some of the hurdles. Research shows women to generally still be disadvantaged in building up an asset base which they could pledge as owner’s equity and/or collateral. Hence the Fund requires no minimum own contribution when applying for finance. Instead the gearing and other factors affecting the viability of a transaction will be taken into consideration for the loan.”

Female entrepreneurs financed though the Business/Partners Women in Business Fund will be supported with additional value added services such as dedicated industry specific mentors and a technical assistance (mentorship) grant of up to R25 000 to aid in the development of the business. A further R35 000 interest free loan for technical assistance, should it be required, will also be available. They will also have access to information, via a dedicated LinkedIn page Women in Business Africa, and networking opportunities, such as workshops and the annual Women’s Month seminar.

For more information on the Business/Partners Women in Business Fund and to apply for funding, click here. The Fund will also have a dedicated female investment team in each of the country’s main provinces to offer support with the application process.