Risk Capital Fund (RCF) for Business and Project Development Finance

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The Risk Capital Fund (RCF), through the Eastern Cape Development Corporation (ECDC), provides business development support funding in the form of Business Finance and Projects Development Finance, to enterprises/entrepreneurs across the various levels of the business cycle. Depending on the needs of the enterprise and its development stage, funding can take the form of equity, loan or a blended equity – loan offering.

The Business Finance will comprise of equity and/or loans invested over the medium to long term. The total investment inclusive of loan finance and equity from ECDC will be limited to 30% of total funding required. ECDC funding shall be subordinated to unlock and secure funding from other financial institutions prior to disbursement of ECDC funds.

The maximum term for the loans will be seven (7) years at a risk adjusted prime related interest rate. In the case of equity investments, ECDC as an institutional investor will always strive to exit at earliest point of commercial viability, and where possible in less than 5 years. Notwithstanding, the ECDC shall work towards exiting equity investments in a period of 5 to 10 years. ECDC Business finance is limited to the lesser of 20% of total project/business funding required and R3 million.

The Project Development Finance (High impact projects) will be considered for the development of preliminary studies, technical and commercial plans, prior to project/business take-off (Not limited to: Feasibility studies, business plan, market testing). Project Development Finance will attract a project development service fee of 30% of the total ECDC investment made. The service fee shall be payable upon completion of the project development initiatives applied for, once the total project take off funding has been secured for the project commercialisation phase.

A cohesive, costed concept/business plan and pre-feasibility study where applicable, will be required, as well as a benchmark model of the concept in order to assess and test the viability of the concept, prior to ECDC commitment of the support to be provided. ECDC project development finance is limited to the lesser of 80% of total project funding required and R1.5 million. The applicant’s 20% own contribution shall be a pre-requisite for the release of the ECDC approved funding.

Application Requirements for the Risk Capital Fund (RCF)

  • A completed and signed application form;
  • A comprehensive, costed concept/business plan;
  • Business registration documentation;
  • IDs of the business owners;
  • Tax clearance or proof of good standing with SARS (where applicable);
  • Proof of address (lease agreement or title deed) – where applicable; and
  • Proof of preliminary studies conducted (where applicable).

Business developments and business writing is our forte at DTC! So let us assist you with the necessary developments to access the RCF.

For more information on the Fund and further assistance – Contact DTC