Funding Options for Small Business Startups in SA

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You need money to start a business. While this can be a tricky part of getting your business off the ground, the good news is that many funding options exist for small businesses.

Securing the right funding for small business startups comes down to understanding your specific funding needs, and being aware of what kind of risks you’re willing to take on. There’s no perfect funding solution – it really just comes down to your individual business plan. 

To help you secure capital for your small business startup, here are some of the most common funding options for small businesses in South Africa. 

Small Business Loans

Bank loans are one of the most common forms of funding for startups and small businesses. Different banks in South Africa offer different loan products for small businesses. These could be empowering, but also restricting.

Be aware of the interest rates and repayment terms, as this could make bank loans a difficult and expensive form of funding for small business startups.

Government Grants

The South African government provides various grants to small businesses to help grow this sector of the economy.

Various government grant funders exist, such as:

It’s important that your small business finds a relevant and suitable grant funding solution based on your industry and background.

Angel Investors

Angel investors are wealthy individuals who invest in startups in exchange for equity. Besides only providing financial support, they could also offer valuable advice, guidance, and industry connections.

Securing angel investment generally involves a lot of networking and pitching to the right people.

Venture Capital

A lot of funding for small business startups comes from venture capital (VC) firms. These organisations invest in early-stage and high-growth startups that show strong potential. 

Venture capital firms generally focus on specific industries and markets. In South Africa, VC funding is generally geared towards tech companies. 

Incubators and Accelerators

Incubators and accelerators provide small businesses with mentorship, office space, and other resources to help them grow and succeed. Some of these programs also provide funding to startups in exchange for equity.

MTN Xlerator Financing Support

  • Direct finance engagements with third-party funding partners as part of the Xlerator finance ecosystem.
  • Working capital to assist in the fulfilment of MTN contracts.
  • Term loans to support long-term business capabilities.


Crowdfunding is a way of raising money for a project or venture by obtaining small contributions from a large number of people, typically via the Internet. It is a form of alternative financing that has become increasingly popular in recent years, allowing individuals, startups, and non-profit organizations to raise funds from a diverse group of individuals, including friends, family, and strangers.

Purchase Order Funding 

Purchase order (PO) funding is a type of financing that helps businesses fulfil large orders from customers by providing the necessary funds to purchase the materials or products required for the order. PO funding is typically used by businesses that do not have the cash flow or credit to fulfil large orders on their own.

It’s important to note that each funding option comes with its own set of advantages and disadvantages. The type of small business funding you choose should depend on the specific requirements and circumstances of your small business.

While there’s always risk involved in gaining funding, you need to secure this for your business to grow. The right funding solution will make a major difference to your business’s success.