Call for applications: NEF arts funding in South Africa

The fund is designed to promote and develop the arts and culture sector by providing affordable loans to start and/or expand small businesses. It is an important source of finance for startup entities and for companies that have limited operating history and do not have access to capital markets.

Qualifying criteria

All compliance requirements listed below must be submitted:

• A brief profile of artists that will be performing is to be included in the business plan.
• Justification for proposed pricing of the event and line up of artists. Demonstration of the artists’ ability to draw a crowd must be submitted as part of the business plan.
• There must be commercial returns at the end of the project, in other words, the revenue to be made through ticket sales must exceed the total cost of the event.
• The venue to be used must be available, have enough capacity and be suitable for the event.
• A reputable distribution channel must be used for ticket sales.
• A demonstration of how the proposed timing of the show is optimal, that is, it should not coincide with other events that may compromise the ticket sales.

Compliance requirements

• Completed NEF application form.
• Business plan and projected income statement, balance sheet and cash flow statement for the duration of the funding period.
• Cash flow projections indicating how the loan will be repaid over the term and the loan duration.
• Registration documents as a legal entity.
• Valid tax clearance certificate.
• Minimum of 50.1% shareholding by black South African citizens as defined in the B-BBEE Act who are resident within the borders of South Africa.
• In need of start-up or expansion capital.
• Require loan from arts and culture venture capital fund of not less than R250 000 and not more than R5 million. However, applicants are welcome to apply for normal NEF funding above R5 million.
• Loan repayment should be within 24 months.
• Own contribution of 5% or more towards the project.
• Audited/reviewed financial statements for the past three years along with management accounts not older than three months only for businesses that have been in operation.
• A minimum of three months must be provided between the closing date of the advert and the actual date when the first disbursement on the loan is required to allow enough time for the project.
• All quotations must be submitted with the application form which amounts to the funding requirement. A minimum of three quotations for procuring goods and services unless it is the procurement of a unique service such as artists.
• Business must have an active bank account.
• Financing any asset such as equipment or infrastructure must be for the purpose of start-ups or expansion with existing contracts or orders.
• Social impact in the form of job creation and economic empowerment by indicating how many job opportunities will be created. Employment numbers must be stated by race, gender, disability, etc. for the project to be funded.
• Applicants should be actively involved in the day-to-day operations of the business. If applicant is employed full-time, he/ she may be required to resign from his/her employment and provide the fund manager with proof of resignation.
• Necessary skills, experience or potential skills appropriate for the enterprise to succeed.
• Have a profit motive and clearly indicate how the loan will be repaid.
• Applicant’s projections must show growth prospects in order to be self-sustainable in future.
• Brief profile and financial strength to settle projected receipts when due of the applicant’s customer(s) or sponsor(s).

“The Department of Arts and Culture realises that in order to achieve radical economic transformation, access to funding must not be limited to few businesses,” NEF said. “The funds will assist businesses with the potential to be self-sustainable and not rely on government for grant funding. Funding will be made available to businesses in all provinces, where more job opportunities will be created.”

View the original call here.