Spice Route Kitchens Business Plan — Funding Requirement & Capital Structure

Sources and uses

Uses	R m	Sources	R m
Restaurant fit-out	5.5	Equity	18.0
Kitchen equipment	3.0
Furniture & décor	1.8
Technology systems	0.8
Catering equipment	1.2
Delivery vehicles	1.0
Initial inventory	0.7
Marketing launch	1.0
Working capital	3.0
Contingency	1.0
Total	18.0	Total	18.0

Figure 19. *Use of funds across the R18m raise.*

Capital adequacy and the rollout

The R18 million funds Phase 1 in full, the flagship fit-out, kitchen and catering equipment, technology, delivery fleet, launch marketing and working capital. The multi-city rollout in Phase 2 and the franchise, express and retail build in Phase 3 are funded predominantly from reinvested operating cash flow. As Section 15 shows, this is achievable at the modelled pace but leaves thin liquidity in Years 2–3. The plan should therefore be structured with either committed follow-on equity or a working-capital facility to protect the rollout against timing and cost variance.

Debt capacity, an option for the lender audience

Although the sponsor seeks equity, the business has meaningful unused debt capacity that founders may elect to use to reduce dilution or to provide the recommended liquidity buffer. Secured against the fit-out and equipment and sized conservatively against early cash flow, an illustrative term facility of roughly R6–7 million would be serviced comfortably, indicative Year-2 debt-service cover of about 2.6×, without threatening the balance sheet. This is presented as an option, not the base case.

Debt-capacity illustration	Value
Indicative term facility	~R6.7m
Pricing	~13.5% (prime + 300bps)
Indicative Year-2 DSCR	~2.6×
Effect	Reduces equity dilution / funds liquidity buffer

NoteA financeable structure for both audiences

For equity investors, the all-equity base case is clean, debt-free and net-cash throughout. For lenders, the asset base and cash generation support a modest secured facility with comfortable cover. Either way, the key recommendation is the same: size committed capital to the true peak funding need of the rollout, not merely the Phase 1 headline, and hold a working-capital buffer through the peak-investment years.