The iMbewu Fund Logistics Sector

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What is the iMbewu Fund?

The iMbewu Fund is a funding scheme provided through the National Empowerment Fund (NEF), who’s role is to support Broad-Based Black Economic Empowerment (B-BBEE). The Fund is aimed at supporting black entrepreneurs that wish to start new businesses, as well as support existing black-owned businesses with expansion capital.  The Fund offers support through funding, mentorship, and training. The Fund supports these entities through offerings of debt, quasi-equity, and equity finance products. Funding ranges from a minimum of R250 000 to a maximum of R15 million.

Funding is Delivered Through…

iMbewu Fund
Entrepreneur Finance

This product is aimed at providing start-up and expansion capital to new and existing businesses, that are owned and managed by black individuals.

Procurement Finance

This product is aimed at aiding black-owned SMEs that have been awarded contracts or tenders by public and private sector entities. The main objective of the product is to ensure that qualifying SMEs have the capacity to carry out the relevant contracts.

Franchise Finance

This product is aimed at entrepreneurs that want to start their own businesses by buying a franchise connected to a certain brand, to reduce risks associated with start-up businesses as they lack a track record.

Priority Sectors in the NEF and iMbewu Fund include:

Agro- processing, energy, financial services, food and beverage, ICT, tourism, transportation, textile industry, services, retail, property, printing services, motor industry, mining services, media, and manufacturing.

Transport in the Logistics Sector

Transport and logistics involves the production, storage, inventory, delivery, and dissemination of goods or services. Transportation and logistics, it is a vital element of the supply chain and it involves proactive procedures to efficiently and safely move products from the manufacturers, to sellers, and end users or the consumers. The primary goal of transport and logistics is to ensure the flow of supply from point A to B, and for customers to receive products on time, without damage, and in line with their expectations. The logistics industry is responsible for moving products domestically and internationally and is therefore a huge contributor to economic development.

Transportation, in being the operation involved in the actual physical delivery or movement of products from one place to another, is part of the larger system of logistics. Important factors include secured item packaging, the best delivery route, and the most appropriate mode of transport. Its functions are segmented into three areas that businesses must observe to ensure effective logistics operations:

• Operations Management- the organisation of processes involved in making goods and delivering services.

• Vehicle and Fleet Management- the coordination of delivery vehicles to ensure efficient and optimum use of resources.

• Infrastructure Administration- securing all infrastructure involved in the logistics process namely roads, ports, airports, canals, rails, and pipeline networks.

iMbewu Fund

Requirements for Transport Contract Finance

There is certain information required by the iMbewu Fund for entrepreneurs to attain Transport Contract Finance. A signed Application Form is required with a copy of the contract. A copy of Bank Statements for the past 6 months (for an existing business) and a copy of the financial statements (for an existing business) – for three years if the business has been operating for that duration are required. A copy of the management accounts (for an existing business) are also required.

A Financial Forecast for the duration of the contract is required, with assumptions that follow. Income Statement assumptions should include sales assumptions linked to the rates per kilometre or tonnage or fixed rate, as per the contract. The DTC team assists with the development of the Financial Projections and Applications. The assumptions should also consider the expected downtime in terms of days when trucks will not operate due to maintenance, changes in shifts, cleaning and inspection, weekends, holidays, and other unforeseeable circumstances.

A business profile is required, which includes the background of the business, when the business was established, the founders and/or shareholders, the business location (or where it will be located), the total funds required and what they will be used for. There should be a brief explanation on how the NEF funding will assist the company in meeting its obligations in terms of the issued contract. The nature of the business is also important and what the business will be transporting.

Balance sheet assumptions should include the capital expenditure for the trucks and it should match the quotations provided by the dealership. Information on the nature of the service that will be rendered in terms of the contract needs to be provided. The make and number of trucks must be stipulated in the contract. The size and engine capacity of the truck and the size and axle capacity of the trailer must match the contract requirements. The capital expenditure for the trailers should match the quotations provided by the manufacturer of the trailers. Assumptions in line with payment terms of the client and suppliers are also important. Details of the fleet management system that the company will use in monitoring the trucks should be provided. A description of the infrastructure that is required to operate the business would also need to be provided.

Why Using DTC is the Solution for You

At Dream Team Capital we understand the complexities of the numerous funding agencies and their criteria. We have assisted many entrepreneurs with their application process to access funding for their business… be it a start-up or expansion, we can assist you with the same!

For more information and assistance on the iMbewu Fund contact the DTC Team.