Part 11
The Funding Application Checklist & Term-Sheet Guide
Institutions differ; the file barely does. Assemble this pack once, keep it current, and every application — bank, DFI, grant or investor — starts from strength. Incomplete documentation remains the number-one stated cause of rejection across SEDFA, the banks and the dtic.
Company & compliance
- CIPC registration documents (COR14.3, MOI) and director IDs
- SARS tax clearance PIN (verify it’s active, not expired)
- VAT/PAYE registration consistent with turnover
- B-BBEE certificate or sworn affidavit (EME/QSE)
- Industry licences (liquor, health, CIDB grading, transport permits, mining rights as applicable)
- Company bank confirmation letter
Financial evidence
- Annual financial statements — 3 years where available (signed)
- Management accounts no older than 3 months
- 6–12 months business bank statements (all accounts)
- Debtors & creditors age analyses
- Personal statements of assets & liabilities for owners/sureties
- Existing facility statements and amortisation schedules
The business case
- Business plan matched to the funder’s mandate (jobs, transformation, localisation where relevant)
- 3–5 year financial model: income statement, balance sheet, cash flow — monthly for year one
- Cash-flow forecast showing the facility’s drawdown and repayment explicitly
- Pitch deck (10–15 slides) for equity processes
- Market evidence: contracts, off-takes, LOIs, listings, pipeline
Transaction-specific
- Itemised supplier quotations (grants & asset finance are quote-driven)
- Sale agreements / franchise agreements for acquisitions
- Lease or title deed for premises-linked funding
- Collateral schedule: description, ownership proof, valuations, existing encumbrances
- Co-funder term sheets where schemes require matching (e.g. BIS)
- ESG/environmental authorisations for industrial & project funding
Exempted Micro Enterprises (turnover under R10m) need only a sworn affidavit or CIPC certificate — automatic Level 4 (Level 1 if at least 51% black-owned, Level 2 if at least 51% black women-owned). Qualifying Small Enterprises (R10m–R50m) with 51%+ black ownership likewise use affidavits; other QSEs and generics need verified scorecards. Funders check the certificate’s validity date first — expired paperwork reads as governance weakness. Amended codes taking effect through 2026 sharpen enterprise-development and ownership emphasis; confirm your verification agency is applying the current codes.
Reading the term sheet: ten clauses that decide the real deal
| Clause | What to check — and negotiate |
|---|---|
| Raising / structuring fees | 1–3% upfront is common at DFIs and specialist lenders; add it to your effective cost comparison. |
| Interest basis | Prime-linked vs fixed vs JIBAR/successor-rate-linked. The SARB is consulting on phasing out the prime benchmark — new long contracts should specify fallback language. |
| Royalty / profit share | Quasi-equity structures charge a percentage of turnover or profit — model it to maturity; it can exceed the interest cost. |
| Personal suretyship | Almost universal for SME debt. Negotiate caps and release triggers (for example, after 24 months’ clean conduct or a covenant level). |
| Covenants | Debt-service cover, leverage, capex limits. Breaches trigger default pricing — build headroom into your model, not just compliance at close. |
| Cession of debtors / contracts | Standard security for working-capital lines; check your key customer contracts permit cession before you warrant it. |
| Conditions precedent | The approval is not the money. CP lists (insurance, registrations, valuations) commonly add 4–8 weeks — start them the day the term sheet arrives. |
| Draw-down expiry & commitment fees | Unused facilities can lapse or cost commitment fees; align expiry with your realistic project timeline. |
| Early-settlement terms | Penalties can trap you in expensive debt when you qualify for cheaper refinancing — negotiate them down at the start, when you have leverage. |
| Equity terms (investors) | Liquidation preference, anti-dilution, board control, founder vesting, drag/tag rights — each shifts real economics more than the headline valuation. Take advice before signing. |
Every funder decision starts with a screener reading for two minutes. Your executive summary must answer, on one page: what the business does and for whom; how much you need, in what instrument, for what specific use; how it repays or exits; what you’re contributing; and why this funder’s mandate is served. If those five answers aren’t visible in two minutes, the rest of the pack rarely gets read.
