Centurion Motor Exchange Business Plan — Funding Requirement and Structure

The funding requirement, the floor-plan facility behind vehicle inventory and the terms of each tranche.

Section 20 of 28

Funding Requirement and Structure

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The business needs R30m of equity, of which only R18m is committed at close

The funding requirement is set by three needs: fitting out two leased sites, carrying the equity-funded 20% of stock, and absorbing operating losses while each site ramps up. The model was iterated until the base case holds at least R1.5m of cash in every month without using the overdraft; the resulting minimum is R1.9m in July 2029.

Figure 1. 1: Sources and uses of funds at financial close

Table 20.1: Use of funds across both tranches, FY28–FY30 (equity, term loan and asset finance)

Use	Amount (R m)	Share	Comment
Capex: site works, buildings, workshop, vehicles, security	18.7	47%	Two leased sites
Technology: IT hardware, DMS, network	1.2	3%	Excludes monthly DMS licences (in opex)
Contingency on capex (10%)	2.0	5%	Held within capex budget
Start-up costs (pre-hire salaries, licences, fees, deposits)	2.8	7%	Expensed
Launch marketing	1.1	3%	Site 2 at 70% of Site 1
Working capital (equity share of stock) and ramp-up liquidity	13.7	35%	Equity-funded 20% of stock; operating losses; cash buffer
Total non-floor-plan funding	39.5	100%
Floor-plan facility (80% of stock, revolving)	up to 50		Peak drawn R41.1m
Debt refinancing	–		Not applicable (start-up)

Table 20.2: Tranche B: Site 2 sources and uses, December 2028 – February 2029 (R million)

Uses	R m	Sources	R m
Site 2 capex	11.0	Investor equity – Tranche B	12.0
Pre-opening and launch	1.7	Asset finance	1.5
Equity share of 50-unit opening stock	2.3	Internally generated cash	1.5
Total	15.0	Total	15.0

Site 2 opening stock of R11.3m is 80% floor-plan funded (R9.1m).

A blended structure matches each facility to the asset it funds

Table 20.3: Recommended facilities and indicative terms

Facility	Amount	Pricing	Tenor / repayment	Security and key terms
Ordinary equity – Founders	R6m	—	Permanent	60% at close; 50% after Tranche B; share vesting over 4 years
Ordinary equity – Investor Tranche A	R12m	R0.3m per 1% (post-money R30m)	Permanent	40%; board seats; reserved matters; tag/drag rights
Ordinary equity – Investor Tranche B	R12m	2x Tranche A price (post-money R72m)	December 2028	Released on milestone certificate; takes Investor to 50%
Development-finance term loan	R6m	Prime + 2.0% (12.5%)	24-month capital moratorium; 36 equal monthly instalments	General notarial bond; cession of debtors; DSCR ≥ 1.30x; net debt/EBITDA ≤ 2.5x
Asset finance	R2.0m + R1.5m	Prime + 1.0%	60-month instalment sale	Financed equipment and vehicles
Floor-plan facility	R25m rising to R50m	Prime + 1.5%	Revolving; settled per vehicle on sale	80% advance on cost; aged-stock curtailment; monthly audits; limited shareholder guarantee
Overdraft (standby)	R4m	Prime + 2.5%	Annual review	Undrawn in base case

Rationale for the funding mix

Equity carries the start-up risk. A new dealer has no trading record, so fit-out, pre-opening losses and the equity share of stock must be equity-funded; lenders will not advance term debt against them on commercial terms.
Floor-plan is the natural stock funder. It is self-liquidating, priced close to prime and scales with inventory, so it funds 80% of the largest asset without fixed repayments.
Term debt is sized to the first year of cash generation. The 24-month moratorium means capital repayments start only when both years of Site 1 trading are complete; the loan is fully repaid by FY32.
Staging protects both parties. Tranche B at a higher price rewards the Founders for proving Site 1, and the Investor avoids funding expansion in a downside.
No grants are assumed. Any enterprise-development or incentive funding obtained would reduce the equity requirement and improve returns.