Khanya Eggs Business Plan — The Funding Ladder
R450,000 founder cash, R3.65m targeted grants and R9.25m of staged loans: the funding structure stage by stage and what secures each tranche.
The Funding Ladder
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- Overview & contents
- i. Important Notice
- 1. Executive Summary
- 2. The South African Egg Market
- 3. Avian Influenza: The Risk That Defines This Business
- 4. SWOT and Competitive Position
- 5. The Five-Stage Roadmap
- 6. The Funding Ladder
- 7. Flock Performance
- 8. Feed Strategy
- 9. Point-of-Lay Pullet Sourcing
- 10. Biosecurity
- 11. Route to Market and Pricing
- 12. Operations and People
- 13. Regulation and Compliance
- 14. Unit Economics
- 15. Capital Expenditure
- 16. Financial Projections
- 17. Break-Even
- 18. Sensitivity and the Grant Question
- 19. Risk Management
- 20. Implementation Roadmap
- 21. Returns
- 22. Key Performance Indicators
- 23. Key Assumptions
- 24. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Stage Capital Schedules
- C. Appendix C: Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Funding Application Checklist
- F. Appendix F: Glossary
- 6.1 Sources and applications
- 6.2 The instruments
- 6.3 Grant funding is targeted, not committed
6.1 Sources and applications
|
Source |
R’000 |
Share |
Character |
|---|---|---|---|
|
Founder cash |
450 |
3.3% |
Contributed at Stage 1; the whole of the founder’s cash requirement |
|
Grant funding, targeted |
3 650 |
27.0% |
Non-repayable and non-dilutive; see Section 6.2 |
|
Staged loans |
9 250 |
68.4% |
Drawn stage by stage against demonstrated performance |
|
Retained cash |
183 |
1.4% |
Generated in Stages 3 to 5 and reinvested |
|
Total capital deployed |
13 533 |
100.0% |
|
Stage |
Founder |
Grants |
Loans |
Stage raise |
Capital deployed |
|---|---|---|---|---|---|
|
Stage 1 |
450 |
100 |
400 |
950 |
650 |
|
Stage 2 |
— |
250 |
1 000 |
1 250 |
853 |
|
Stage 3 |
— |
600 |
1 600 |
2 200 |
1 760 |
|
Stage 4 |
— |
1 300 |
3 000 |
4 300 |
4 100 |
|
Stage 5 |
— |
1 400 |
3 250 |
4 650 |
6 170 |
|
Total |
450 |
3 650 |
9 250 |
13 350 |
13 533 |
External funding of R13.35 million falls R183 000 short of the R13.53 million capital programme. That difference is funded from cash generated in Stages 3 to 5, when the business is EBITDA positive, and it is the only point at which the plan relies on its own trading to fund capital.
6.2 The instruments
|
Instrument |
Stage |
Character |
What it requires |
|---|---|---|---|
|
Founder cash |
1 |
Equity |
R450 000; the entrepreneur’s own money and the credibility test for every subsequent application |
|
NYDA grant |
1 |
Non-repayable |
Youth eligibility, a business plan, training completion and a modest own contribution |
|
SEDFA micro-finance |
1 |
Loan |
A registered entity, tax compliance and a bank account; the smallest formal loan in the ladder |
|
SEDFA small enterprise loan |
2 |
Loan |
Twelve months of trading, production records and a clean Stage 1 repayment record |
|
AgriSETA support |
2 |
Grant or subsidy |
Registered training and skills development for the first employee |
|
DALRRD Blended Finance Scheme via Land Bank |
3 and 4 |
Grant plus concessional loan |
A scorecard assessment, two years of financial statements and written offtake arrangements |
|
Agro-Energy Fund |
4 |
Concessional loan |
Energy investment; funds the solar photovoltaic and battery component |
|
IDC or commercial bank |
5 |
Loan |
Full commercial assessment on a business with a three-year track record |
|
Offtake-linked ESD facility |
5 |
Loan or grant |
A signed retail or wholesale supply agreement with a corporate counterparty |
6.3 Grant funding is targeted, not committed
R3.65 million of the programme, 27.0 per cent, is targeted from grant instruments. Those instruments exist, they are used by South African agricultural enterprises, and the staging in this plan is designed specifically to make the business eligible for each in turn. None of them is committed, and all of them are competitive and slow.