{"id":10270,"date":"2022-03-29T11:26:36","date_gmt":"2022-03-29T09:26:36","guid":{"rendered":"https:\/\/xneelo.co.za\/insights\/?p=10270"},"modified":"2026-04-13T09:54:15","modified_gmt":"2026-04-13T07:54:15","slug":"an-entrepreneurs-guide-to-funding","status":"publish","type":"post","link":"https:\/\/xneelo.co.za\/insights\/an-entrepreneurs-guide-to-funding\/","title":{"rendered":"An entrepreneur&#8217;s guide to funding"},"content":{"rendered":"\r\n<p><em>As part of our series on the financial aspects of business, we recently covered the <\/em><a href=\"https:\/\/xneelo.co.za\/insights\/a-tax-primer-for-small-businesses\/\"><em>tax basics<\/em><\/a><em> every small business should know. This time we look at the one factor that unites every business, big or small: capital.<\/em><\/p>\r\n\r\n\r\n\r\n<p>As an entrepreneur about to step out into the world of business ownership, or even an existing business wanting to grow,\u00a0 securing funding is a challenge everyone has to face.<br \/><strong><br \/><\/strong>Because different funding options will offer different opportunities, you\u2019ll need to decide on what is the right fit for your <a href=\"https:\/\/xneelo.co.za\/insights\/the-best-advice-for-south-african-entrepreneurs-from-other-entrepreneurs\/\">business<\/a>. Here\u2019s a look at seven funding options.\u00a0<br \/><br \/><\/p>\r\n\r\n\r\n\r\n<h2>1. Bank loans<\/h2>\r\n\r\n\r\n\r\n<p id=\"h-depending-on-how-much-capital-you-ll-need-the-best-place-to-start-is-with-your-bank-most-banks-offer-finance-through-business-loans-these-can-be-secured-requiring-collateral-or-unsecured-no-collateral-required\">Depending on how much capital you\u2019ll need, the best place to start is with your bank. Most banks offer finance through business loans. These can be secured (requiring collateral) or unsecured (no collateral required.)<\/p>\r\n\r\n\r\n\r\n<p id=\"h-essentially-the-bank-is-extending-you-a-line-of-credit-which-you-ll-have-to-repay-over-a-period-of-time-with-interest\">Essentially, the bank is extending you a line of credit, which you\u2019ll have to repay over a period of time with interest.\u00a0<\/p>\r\n\r\n\r\n\r\n<p id=\"h-tip-it-s-easier-to-be-approved-for-a-business-loan-if-your-company-is-already-operational-having-an-existing-purchase-order-is-even-better\"><strong>Tip: <\/strong>It\u2019s easier to be approved for a business loan if your company is already operational. Having an existing purchase order is even better.<br \/><br \/><\/p>\r\n\r\n\r\n\r\n<h2>2. Government grants<\/h2>\r\n\r\n\r\n\r\n<p id=\"h-unlike-a-bank-loan-you-don-t-need-to-repay-a-government-grant-but-this-doesn-t-mean-you-re-getting-money-for-free-you-ll-need-to-follow-a-very-strict-and-lengthy-process-that-may-only-result-in-partial-financial-funding\">Unlike a bank loan, you don\u2019t need to repay a <a href=\"https:\/\/www.oldmutual.co.za\/articles\/understanding-business-funding-and-finance-for-your-start-up\">government grant<\/a>. But this doesn\u2019t mean you\u2019re getting money for free \u2013 you\u2019ll need to follow a very strict and lengthy process that may only result in partial financial funding.<\/p>\r\n\r\n\r\n\r\n<p>When applying for a grant, it\u2019s important to find and contact the best department for your business. They don\u2019t work together, so they won\u2019t refer applications to one another.\u00a0<\/p>\r\n\r\n\r\n\r\n<p><strong>Tip: <\/strong>You can find more information about the types of government grants available <a href=\"https:\/\/smesouthafrica.co.za\/guide-government-funding-small-businesses\/\">here<\/a>.\u00a0<br \/><br \/><\/p>\r\n\r\n\r\n\r\n<h2>3. Bootstrapping<\/h2>\r\n\r\n\r\n\r\n<p id=\"h-if-you-don-t-have-any-outside-investors-you-may-need-to-use-your-personal-finances-i-e-savings-to-fund-your-business-in-the-beginning-this-is-known-as-bootstrapping-and-a-number-of-big-businesses-like-gopro-surveymonkey-and-spanx-got-started-this-way\">If you don\u2019t have any outside investors, you may need to use your personal finances \u2013 i.e. savings \u2013 to fund your business in the beginning. This is known as bootstrapping and a number of big businesses like GoPro, SurveyMonkey and Spanx got started this way.\u00a0\u00a0<br \/><br \/><\/p>\r\n\r\n\r\n\r\n<h2>4. Crowdfunding<\/h2>\r\n\r\n\r\n\r\n<p id=\"h-don-t-ignore-the-option-of-crowdfunding-where-small-amounts-of-money-from-a-large-number-of-people-can-help-fund-a-new-business-take-sugarbird-gin-as-an-example-steel-cut-spirits-a-four-person-company-came-up-with-the-idea-to-make-a-premium-gin-at-an-affordable-price-and-successfully-raised-more-than-r1-million-through-crowdfunding\">Don\u2019t ignore the option of <a href=\"https:\/\/www.investopedia.com\/terms\/c\/crowdfunding.asp\">crowdfunding<\/a>, where small amounts of money from a large number of people can help fund a new business. Take Sugarbird Gin as an example \u2013 <a href=\"https:\/\/www.bizcommunity.com\/Article\/196\/713\/172227.html\">Steel Cut Spirits<\/a>, a four-person company, came up with the idea to make a premium gin at an affordable price and successfully raised more than R1 million through crowdfunding.\u00a0<\/p>\r\n\r\n\r\n\r\n<p id=\"h-tip-there-are-a-number-of-local-crowdfunding-platforms-such-as-backabuddy-and-thundafund-that-can-help-you-raise-funds-in-exchange-for-rewards-or-equity-in-your-business\"><strong>Tip: <\/strong>There are a number of local crowdfunding platforms, such as <a href=\"https:\/\/www.backabuddy.co.za\/\">BackaBuddy<\/a> and <a href=\"https:\/\/thundafund.com\/\">Thundafund<\/a> that can help you raise funds in exchange for rewards or equity in your business.\u00a0<br \/><br \/><\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-5-venture-capital\" class=\"wp-block-heading\">5. Venture capital\u00a0<\/h2>\r\n\r\n\r\n\r\n<p>A <a href=\"https:\/\/www.oldmutual.co.za\/articles\/understanding-business-funding-and-finance-for-your-start-up\">venture capitalist<\/a> is an equity investor, whose main focus is to make money. They usually look at businesses that are built for growth and will provide good returns on their initial investment. Typically, they want to sell their shares in around five years for 10 times what they initially paid.\u00a0\u00a0<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\" id=\"h-6-angel-investors\"><br \/>6. Angel investors<\/h2>\r\n<p>This type of investor isn\u2019t financially motivated and is often a friend, family or mentor who gives a <a href=\"https:\/\/www.investopedia.com\/terms\/a\/angelinvestor.asp\">one-time investment<\/a> to help get a business up and running. Angel investors usually get involved during the early stages of startups and their investment is in exchange for ownership equity.<\/p>\r\n\r\n\r\n\r\n<p>&nbsp;<\/p>\r\n\r\n\r\n\r\n<p><strong>Tip: <\/strong>Have a look at the <a href=\"https:\/\/www.investmentnetwork.co.za\/\">Angel Investment Network<\/a>, which makes it easier to connect with potential angel investors or entrepreneurs.\u00a0<br \/><br \/><\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-7-business-loans\" class=\"wp-block-heading\">7. Business loans<\/h2>\r\n\r\n\r\n\r\n<p>Existing businesses that require additional cash flow have the option of approaching business loan providers such as <a href=\"https:\/\/www.retailcapital.co.za\/\">Retail Capital<\/a>. Certain loans don\u2019t require collateral, but do require that your business meet certain criteria such as a minimum trading period and turnover.\u00a0<\/p>\r\n\r\n\r\n\r\n<p><strong>Tip: <\/strong>Always read the terms and conditions and funding requirements first to ensure your business is applicable before applying.<br \/>\u00a0<\/p>\r\n\r\n\r\n\r\n<h2 id=\"h-before-you-approach-funding-providers\" class=\"wp-block-heading\"><strong>Before you approach funding providers<\/strong><\/h2>\r\n\r\n\r\n\r\n<p>Take the time to do your research properly before approaching a potential investor or lender and ensure you can adapt your business strategy to meet their demands or expectations. They should also have a clear view of what you intend to use the funds for.\u00a0<\/p>\r\n\r\n\r\n\r\n<p>We asked one of our valued clients in the financial arena for their expertise on what to do before approaching funding providers.<\/p>\r\n\r\n\r\n\r\n<p>\u201cBe clear on what you want to do,\u201d advises Lou van Niekerk, director of <a href=\"https:\/\/triplebar.co.za\/\">TripleBar business direction<\/a>. \u201cYou might have a lot of big ideas but when applying for funding or soliciting investment it is important to have a clear, concise and focused proposal or presentation. This approach enables the institution or investors to quickly ascertain the risk and reward of what you are asking money for.\u201d<\/p>\r\n\r\n\r\n\r\n<p>As important it is to be clear on your objectives, Lou says it&#8217;s equally important to stick to them. \u201cIt is easy to start veering off on tangents when you get going in business but it is essential to know what your objectives are, to plan on how you will achieve those objectives and to stick to your planning.\u201d<\/p>\r\n\r\n\r\n\r\n<p>Getting professional assistance in the early days is key. \u201cEnsure that you speak to an accountant to assist in translating your objectives into a cash flow projection. It will not be possible to determine exactly how much money you need if detailed thought has not gone into defining the project scope, its timelines and its deliverables, concludes Lou.<\/p>\r\n\r\n\r\n\r\n<p>Whether you\u2019re planning to launch an e-commerce business or you\u2019re already up and running, xneelo is here to support you with a number of<a href=\"https:\/\/xneelo.co.za\/web-hosting\/\"> affordable hosting packages<\/a> to suit every need.<\/p>\r\n\r\n\r\n\r\n<p>Image source: <a href=\"https:\/\/www.gettyimages.com\/detail\/photo\/mixed-race-designer-working-in-studio-royalty-free-image\/606353137\">Getty<\/a><\/p>\r\n","protected":false,"plain":"<!-- wp:paragraph -->\r\n<p><em>As part of our series on the financial aspects of business, we recently covered the <\/em><a href=\"https:\/\/xneelo.co.za\/insights\/a-tax-primer-for-small-businesses\/\"><em>tax basics<\/em><\/a><em> every small business should know. This time we look at the one factor that unites every business, big or small: capital.<\/em><\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>As an entrepreneur about to step out into the world of business ownership, or even an existing business wanting to grow,\u00a0 securing funding is a challenge everyone has to face.<br \/><strong><br \/><\/strong>Because different funding options will offer different opportunities, you\u2019ll need to decide on what is the right fit for your <a href=\"https:\/\/xneelo.co.za\/insights\/the-best-advice-for-south-african-entrepreneurs-from-other-entrepreneurs\/\">business<\/a>. Here\u2019s a look at seven funding options.\u00a0<br \/><br \/><\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:list {\"ordered\":true} -->\r\n<h2>1. Bank loans<\/h2>\r\n<!-- \/wp:list -->\r\n\r\n<!-- wp:paragraph -->\r\n<p id=\"h-depending-on-how-much-capital-you-ll-need-the-best-place-to-start-is-with-your-bank-most-banks-offer-finance-through-business-loans-these-can-be-secured-requiring-collateral-or-unsecured-no-collateral-required\">Depending on how much capital you\u2019ll need, the best place to start is with your bank. Most banks offer finance through business loans. These can be secured (requiring collateral) or unsecured (no collateral required.)<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p id=\"h-essentially-the-bank-is-extending-you-a-line-of-credit-which-you-ll-have-to-repay-over-a-period-of-time-with-interest\">Essentially, the bank is extending you a line of credit, which you\u2019ll have to repay over a period of time with interest.\u00a0<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p id=\"h-tip-it-s-easier-to-be-approved-for-a-business-loan-if-your-company-is-already-operational-having-an-existing-purchase-order-is-even-better\"><strong>Tip: <\/strong>It\u2019s easier to be approved for a business loan if your company is already operational. Having an existing purchase order is even better.<br \/><br \/><\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:list {\"ordered\":true,\"start\":2} -->\r\n<h2>2. Government grants<\/h2>\r\n<!-- \/wp:list -->\r\n\r\n<!-- wp:paragraph -->\r\n<p id=\"h-unlike-a-bank-loan-you-don-t-need-to-repay-a-government-grant-but-this-doesn-t-mean-you-re-getting-money-for-free-you-ll-need-to-follow-a-very-strict-and-lengthy-process-that-may-only-result-in-partial-financial-funding\">Unlike a bank loan, you don\u2019t need to repay a <a href=\"https:\/\/www.oldmutual.co.za\/articles\/understanding-business-funding-and-finance-for-your-start-up\">government grant<\/a>. But this doesn\u2019t mean you\u2019re getting money for free \u2013 you\u2019ll need to follow a very strict and lengthy process that may only result in partial financial funding.<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>When applying for a grant, it\u2019s important to find and contact the best department for your business. They don\u2019t work together, so they won\u2019t refer applications to one another.\u00a0<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p><strong>Tip: <\/strong>You can find more information about the types of government grants available <a href=\"https:\/\/smesouthafrica.co.za\/guide-government-funding-small-businesses\/\">here<\/a>.\u00a0<br \/><br \/><\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:list {\"ordered\":true,\"start\":3} -->\r\n<h2>3. Bootstrapping<\/h2>\r\n<!-- \/wp:list -->\r\n\r\n<!-- wp:paragraph -->\r\n<p id=\"h-if-you-don-t-have-any-outside-investors-you-may-need-to-use-your-personal-finances-i-e-savings-to-fund-your-business-in-the-beginning-this-is-known-as-bootstrapping-and-a-number-of-big-businesses-like-gopro-surveymonkey-and-spanx-got-started-this-way\">If you don\u2019t have any outside investors, you may need to use your personal finances \u2013 i.e. savings \u2013 to fund your business in the beginning. This is known as bootstrapping and a number of big businesses like GoPro, SurveyMonkey and Spanx got started this way.\u00a0\u00a0<br \/><br \/><\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:list {\"ordered\":true,\"start\":4} -->\r\n<h2>4. Crowdfunding<\/h2>\r\n<!-- \/wp:list -->\r\n\r\n<!-- wp:paragraph -->\r\n<p id=\"h-don-t-ignore-the-option-of-crowdfunding-where-small-amounts-of-money-from-a-large-number-of-people-can-help-fund-a-new-business-take-sugarbird-gin-as-an-example-steel-cut-spirits-a-four-person-company-came-up-with-the-idea-to-make-a-premium-gin-at-an-affordable-price-and-successfully-raised-more-than-r1-million-through-crowdfunding\">Don\u2019t ignore the option of <a href=\"https:\/\/www.investopedia.com\/terms\/c\/crowdfunding.asp\">crowdfunding<\/a>, where small amounts of money from a large number of people can help fund a new business. Take Sugarbird Gin as an example \u2013 <a href=\"https:\/\/www.bizcommunity.com\/Article\/196\/713\/172227.html\">Steel Cut Spirits<\/a>, a four-person company, came up with the idea to make a premium gin at an affordable price and successfully raised more than R1 million through crowdfunding.\u00a0<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p id=\"h-tip-there-are-a-number-of-local-crowdfunding-platforms-such-as-backabuddy-and-thundafund-that-can-help-you-raise-funds-in-exchange-for-rewards-or-equity-in-your-business\"><strong>Tip: <\/strong>There are a number of local crowdfunding platforms, such as <a href=\"https:\/\/www.backabuddy.co.za\/\">BackaBuddy<\/a> and <a href=\"https:\/\/thundafund.com\/\">Thundafund<\/a> that can help you raise funds in exchange for rewards or equity in your business.\u00a0<br \/><br \/><\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:heading -->\r\n<h2 id=\"h-5-venture-capital\" class=\"wp-block-heading\">5. Venture capital\u00a0<\/h2>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>A <a href=\"https:\/\/www.oldmutual.co.za\/articles\/understanding-business-funding-and-finance-for-your-start-up\">venture capitalist<\/a> is an equity investor, whose main focus is to make money. They usually look at businesses that are built for growth and will provide good returns on their initial investment. Typically, they want to sell their shares in around five years for 10 times what they initially paid.\u00a0\u00a0<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:heading -->\r\n<h2 id=\"h-6-angel-investors\"><br \/>6. Angel investors<\/h2>\r\n<p>This type of investor isn\u2019t financially motivated and is often a friend, family or mentor who gives a <a href=\"https:\/\/www.investopedia.com\/terms\/a\/angelinvestor.asp\">one-time investment<\/a> to help get a business up and running. Angel investors usually get involved during the early stages of startups and their investment is in exchange for ownership equity.<\/p>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>&nbsp;<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p><strong>Tip: <\/strong>Have a look at the <a href=\"https:\/\/www.investmentnetwork.co.za\/\">Angel Investment Network<\/a>, which makes it easier to connect with potential angel investors or entrepreneurs.\u00a0<br \/><br \/><\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:heading -->\r\n<h2 id=\"h-7-business-loans\" class=\"wp-block-heading\">7. Business loans<\/h2>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>Existing businesses that require additional cash flow have the option of approaching business loan providers such as <a href=\"https:\/\/www.retailcapital.co.za\/\">Retail Capital<\/a>. Certain loans don\u2019t require collateral, but do require that your business meet certain criteria such as a minimum trading period and turnover.\u00a0<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p><strong>Tip: <\/strong>Always read the terms and conditions and funding requirements first to ensure your business is applicable before applying.<br \/>\u00a0<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:heading -->\r\n<h2 id=\"h-before-you-approach-funding-providers\" class=\"wp-block-heading\"><strong>Before you approach funding providers<\/strong><\/h2>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>Take the time to do your research properly before approaching a potential investor or lender and ensure you can adapt your business strategy to meet their demands or expectations. They should also have a clear view of what you intend to use the funds for.\u00a0<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>We asked one of our valued clients in the financial arena for their expertise on what to do before approaching funding providers.<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>\u201cBe clear on what you want to do,\u201d advises Lou van Niekerk, director of <a href=\"https:\/\/triplebar.co.za\/\">TripleBar business direction<\/a>. \u201cYou might have a lot of big ideas but when applying for funding or soliciting investment it is important to have a clear, concise and focused proposal or presentation. This approach enables the institution or investors to quickly ascertain the risk and reward of what you are asking money for.\u201d<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>As important it is to be clear on your objectives, Lou says it's equally important to stick to them. \u201cIt is easy to start veering off on tangents when you get going in business but it is essential to know what your objectives are, to plan on how you will achieve those objectives and to stick to your planning.\u201d<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>Getting professional assistance in the early days is key. \u201cEnsure that you speak to an accountant to assist in translating your objectives into a cash flow projection. It will not be possible to determine exactly how much money you need if detailed thought has not gone into defining the project scope, its timelines and its deliverables, concludes Lou.<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>Whether you\u2019re planning to launch an e-commerce business or you\u2019re already up and running, xneelo is here to support you with a number of<a href=\"https:\/\/xneelo.co.za\/web-hosting\/\"> affordable hosting packages<\/a> to suit every need.<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>Image source: <a href=\"https:\/\/www.gettyimages.com\/detail\/photo\/mixed-race-designer-working-in-studio-royalty-free-image\/606353137\">Getty<\/a><\/p>\r\n<!-- \/wp:paragraph -->"},"excerpt":{"rendered":"<p>We asked one of our valued clients in the financial arena for their expertise on what to do before approaching funding providers.<\/p>\n","protected":false},"author":7,"featured_media":10273,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"lsx_disable_title":"0","_searchwp_excluded":"","inline_featured_image":false,"footnotes":""},"categories":[1519],"tags":[6310],"content_group":[6450,6399,6453],"class_list":["post-10270","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-advice","tag-small-business-funding"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - 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