Unlocking SME funding in South Africa: What you need to know for 2025

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“Barely 20% of smaller enterprises get the finance they apply for. That figure should be much higher – especially now that market confidence is improving and the lending environment is better than it has been for a long time,” says Luncedo Mtwentwe, CEO of Vantage Advisory, which specialises in capital raising and advisory services for small and medium-sized businesses.

“There’s a big disconnect between the help that’s out there for SMEs and their ability to access that assistance. Often, it’s because they don’t know what’s available. My advice to them is to do their homework and then tap into the organisations that are there to assist,” Mtwentwe urges.

“The time is now – seize the opportunity! Interest rates have dropped, inflation is easing, confidence in the economy is rebounding, and financial institutions are more willing to lend to entrepreneurs who can show that they have a sound business idea and the ability to follow through on it.”

Mtwentwe is also the host of the SAICA Biz Impact, a podcast from the South African Institute of Chartered Accountants (SAICA) that offers practical advice to SMEs on overcoming common business hurdles.

Funding is aplenty if you know where to look

He believes small business owners shouldn’t buy into the myth that there isn’t funding available to support small, growing enterprises.

“In my experience, funders have become more willing to engage, but what they want is assurances. It’s not enough to have a great idea. Businesses need to present themselves as viable, scalable, and well-managed operations. This is where preparation becomes critical, so now is the time to get your ducks in a row.

“This means having your financials in order, proving product viability, and showing a clear plan for how you’ll use and repay the funding.”

Three steps to funding readiness

To secure funding, Mtwentwe advises entrepreneurs to focus on the following:

Understand your financials. Funders want more than just numbers. “Entrepreneurs need to breathe life into their financials. It’s about understanding what the numbers mean and being able to tell a compelling story. If you can’t explain why your profit margins have changed or why you need more liquidity, it’s a red flag for funders,” he says.

Prove product viability. Demonstrate demand for your product, even if it’s being sold informally. “Don’t wait for perfection before you start,” he emphasises. “Show evidence of demand, even if it's early days. This gives funders the confidence that they’re not supporting a pipe dream.”

Have a clear repayment plan. It’s vital to know exactly how you’ll use the funding and how you plan to repay it. “Funders want to see a clear plan for how the money will be deployed and returned. If an entrepreneur can articulate how funds will be allocated to growth and repayment, it helps build trust,” Mtwentwe states.

The value of business advisors

He adds that business advisors can help to break through barriers by bringing their financial and business expertise to help SMEs navigate the funding landscape. “Finding the right funding is like hunting – you need the right guide to avoid costly mistakes and make sure you’re targeting the right opportunities. There are number of new funders that typically do not require the past five years of financials, but only what’s needed.

He adds that it is only through taking concrete action that small businesses can seize opportunities as they present themselves.

“Waiting until everyone else is ready means you’ll be at the back of the queue,” Mtwentwe warns.

“Now is the time for entrepreneurs to ensure they are funding-ready. Whether it’s understanding your financials, proving your product’s demand, or laying out a clear plan for growth, these actions will set you apart when funders are looking for viable investment opportunities.”