Limpopo Business 2017-18 edition

FOCUS
LEDA: Enterprise
Development and
Finance Division
Enabling business to grow while reducing risk.
The Enterprise Development and Finance Division (EDFD) within
the Limpopo Economic Development Agency (LEDA) provides
financial products in support of businesses which are starting out
or which need funds to tackle a project.
Funding is available in a wide range of sectors, including manufacturing,
agri-business (agri-processing), construction, mining and mining
beneficiation, tourism, business support services, retail, professional
services, transport services and ICT.
Projects in the following sectors do not qualify for LEDA products:
primary agriculture; infrastructure development; residential and commercial
property; explorations; product development and licensing;
non-profit organisations(NPOs) and Trusts.
Among the most important criteria which the Enterprise Development
and Finance Division uses to assess the desirability of a business or project
are the possible developmental impact in terms of new jobs being
created or a facility being built, proof that there is a viable market for the
product or service about to be offered and profitability.
Core funding products
• Asset / equipment finance
• Procurement / bridging finance
• Working capital finance
• Start-up finance
• Franchise finance
Although LEDA is active in each of these product divisions, the most
popular in recent years has been procurement/bridging finance option.
This financial product requires no collateral and is linked to the business
owner having a government contract. This reduces risk for all parties.
“There are three parties involved,” says Loan Proposals and Origination
Manager Chavani Khosa. “There is the employer government department
that issues the contract for work, the client (or business undertaking
the work) and LEDA. All three parties sign the agreement which states
that the whole amount must be paid to LEDA when the client has
completed the job.”
TEN IMPORTANT
STEPS TO SECURE
LEDA FUNDING:
1. Safety of the facility
2. Background of the client
3. Financial position of the
client
4. Needs of the client
5. Security / collateral
6. Desirability and
developmental impact
7. Demonstrate the market
8. Profitability
9. Cash flow available for
debt service
10. Source of loan
repayment
The client needs to show LEDA
that he or she has a purchase order
from a government department.
That will unlock funding to allow
work to begin on the project and
the client will then submit regular
progress reports to LEDA. Once the
job is done and the full payment
paid to LEDA, the loan amount and
interest is subtracted by LEDA and
the balance paid out to the client
or contractor.
In the case of an application
being received for a working
LIMPOPO BUSINESS 2017/18
26