Many aspiring entrepreneurs do not know that they can access funding for franchise businesses.
However, Babalwa Mapisa, who is a Shell garage franchisee in Greenfields, East London, is proof that with thorough research on funding options and backing from government entities, owning a franchise is within reach.
Xolani Meva, who is head of regions at the Small Enterprise Development and Finance Agency (Sedfa), told Vutivi News that their franchise funding was available for new franchisees and to those looking to expand existing outlets.
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“The franchise funding is available across the economic sectors. Each application however needs to comply with Sedfa’s investment assessment and approval processes,” he said.
The maximum funding amount available is R15 million and it covers set-up costs, equipment and working capital.
Mapisa, who is a qualified chartered accountant and internal auditor, received her franchise funding two years ago from the Small Enterprise Finance Agency, which was incorporated into Sedfa last year.
“I have always aspired to transition into entrepreneurship. At the time, acquiring a franchise presented the most ideal and structured entry point into the retail sector, offering a proven model with established systems and brand recognition,” she said.
Mapisa mentioned that the funding provided access to loan finance that would not have been easy to secure from a commercial bank.
“Unlike commercial lenders, Sefa did not require full security for the loan, which was a significant advantage,” she said.
“This flexibility reflects their developmental mandate and their understanding that most first-time entrepreneurs do not have extensive assets to securitise large loans. Their support was instrumental in acquiring the franchise and getting the business off the ground.”
Sefa provided Mapisa with funding for the acquisition of the business while she covered the working capital on her own.
Despite the application process being long and complex as a wide range of supporting documents were needed, Mapisa said that agents facilitating the process had been helpful.
Mapisa’s franchise business currently has 22 employees.
