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IN one of the largest SME financing funds in South Africa,
Business Partners this week kicked off the R400m Business Partners Venture
Fund.
According to Gerrie van Biljon of Business Partners, SMEs
are key drivers of wealth in South Africa and it is reported that SMEs
contribute 40% of GDP and employ 60% of the workplace in formal employment.
He said that although South Africa is ranked 37th out of 144
countries for venture capital funding in the latest Global Competitiveness
Report, small businesses, particularly those in the concept or start-up phase,
struggle to find funding as financiers are reluctant to enter this high-risk
arena.
“The limited funding and support for SMEs often results in
innovative business ideas, many of which are developed at tertiary
institutions, incubator programs, innovation hubs and industry groups, never
getting off the ground. The Business Partners Venture Fund can now plug this
hole,” said Van Biljon.
The fund will consider first round finance deals up to R10m,
with the focus on the venture’s viability and high potential for growth.
Consideration will be given to early stage investments after the research and
development phase.
“We recognise the potential benefit that innovative and high
growth enterprises can bring to the country. It is for this reason that the
company is launching the fund - to finance exactly this type of high impact
entrepreneur.”
Van Biljon said that often, the majority of financing deals
are made available to SMEs in typical lifestyle businesses, such as coffee
shops or small manufacturing outlets, which are considered the ‘safer’ option.
“We feel that all businesses with the potential to reach
‘blue sky’ should be considered for funding, as SMEs within all sectors have
the potential to flourish. We currently see great potential and opportunity
within clean energy, agri-processing, bio-tech and ICT sectors, and want to
give entrepreneurs the opportunity to develop new products or to take existing
businesses to a new level.”
To achieve government’s goal of 5 million jobs created by
2020, businesses and in particular SMEs, need to expand and provide more job
opportunities for South Africans, said Van Biljon.
Business Partners, a specialist risk finance company for
formal small and medium enterprises (SMEs), has more than 30 years experience
in the SME sector, having assisted more than 69 000 businesses.
“We understand that entrepreneurs need more than just money to be successful. Support, advice and mentorship are equally essential. SMEs funded by the Business Partners Venture Fund will benefit from our wisdom, experience and advice,” he said.
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