Spartan Impact Finance 4
With EUR 300,000 Spartan Impact Finance will be able to fund 2 SME companies operating in the security services and manufacturing sector, providing them with working capital.
- Local partner investment
- 10 new jobs
- 100 people reached
Spartan is a alternative funder and NBFI [Non-Bank Finance Institution] that focuses on financing SMEs in South Africa.
Based in Johannesburg, Spartan offers 3 categories of financing for Small & Medium Businesses to support their growth. These 3 categories are:
- Working Capital Finance
- Specialised Asset Finance
- Growth Finance
These finance options address the majority of SMEs’ finance needs - that are not usually met by traditional funders.
Working Capital Finance is offered via Bridging Finance [1-3 month revolving facility] or Medium-Term Loan [6-12 month term] mechanisms - both being solutions that assist businesses with solving growth related cash flow challenges e.g. periodic large contracts or projects that are either short or long term in nature.
Specialised Asset Finance [24-60 months term] is offered for acquiring any type of tangible or intangible asset or equipment to be utilized in productive growth - and where traditional funders are uncomfortable with the nature of these items. Some examples include:
- Machinery Finance for all machinery types e.g. manufacturing, warehousing, agro-processing, mining support, construction, engineering, etc
- Technology Finance, Software Finance and any innovative technology driven item
- Fit-Out Finance for fitting out building interiors
- Logistics vehicles and Yellow Metal equipment
Growth Finance [24-60 months term] is offered for expansion initiatives that required a structured finance solution with a combination of the above finance mechanisms.
Spartan is focussed on SMEs in a growth context and not a start-up nor distress context.
With the EUR 300K Spartan Impact Finance will be able to fund 2 SME companies operating in the security services and manufaturing sector, providing them with working capital for growth opportunities and/or enabling them to purchase specialised equipment.
|Company name||Spartan Impact Finance 4|
Impact of this project
- With this investment 10 jobs are created
- With this investment 100 people are reached
About the risks
What are the risks of investing money?
Our local partners cover the risk of currency exchange rates and loan defaults. They do this by maintaining financial reserves for this purpose . In addition, there is an option to claim their equity if needed. While these measures are intended to minimize the risk to funders, our local partners face risks of their own that could effect their ability to secure a loan. These include: - bankruptcy - currency exchange rates - fraud - operational risks - political and regulatory changes - natural disasters or epidemics.
If you invest direct in a company, hence not via a local partner, risks of default are not covered. As the risk that comes with direct lendings is generally higher than an investment through a local partner, the interest rate is also higher.
There is also some operational risk at Lendahand. An example might be that Lendahand is unable to find shareholders to finance their activities. In such a case, Lendahand will handle outstanding loans at the best of its ability. At the same time, our ability to legally address non-payment from local partners becomes understandably difficult.
How does Lendahand minimize the risks?
Local partners must adhere to our mission and work with us to provide loans that are affordable. This insures that local entrepreneurs have access to financing that allows them to grow their business. A local partner must also have a track record. In other words, they must have proven themselves as a meso-credit provider for SMEs. This means (for instance) that the partner must have a solid credit portfolio, along with enough buffers and equity to compensate for unexpected downturns. We also check the organizational structure of the partner and how robust their (internal) procedures are. Finally, the loans that a local partner receives via Lendahand must be in proportion to the partner's total balance sheet. A healthy balance between effectuating influence and independence is crucial. If you would like to receive more information on the financial indicators we employ, please contact us via firstname.lastname@example.org.
When currency exchange risks become too high for a local partner, Lendahand will urge the local partner to cover these risks. In some scenario's the local partner is contractually obliged to comply with these demands.
Lendahand will always conduct due diligence when a Company requests for a direct loan. To provide more insights on risks, an independent partie comes in to perform brief analysis on direct loans. The results can be downloaded on the project detail page of the direct loan. However, this analysis serves primarily as a tool for your own opinion and conclusion. Pay attention to the fact this analysis is not an investing advice.
Does Lendahand provide guarantee on the loans?
Normally we don't. Local partners take care of the repayment, even if (some) entrepreneurs are unable to do so themselves. If the local partner is for some reason unable to repay then there is a chance of partial or full loss of your money. For this reason Lendahand only selects financially solid partners based on strict criteria.
Also, for most direct loans no guarantee is provided. For these investments currency risks are covered however.
Sometimes - and only for some direct investments in Africa - our partner Sida, part of the Swedish government, will provide a guarantee with a maximum of 50%. If this is the case, it will be indicated explicitly.
Does Lendahand have a license or exemption?
Yes. The Dutch Authority Financial Markets (AFM) has provided Hands-on B.V. (with trade name 'Lendahand') in September 2016 with an investment firm license in accordance with article 2:96 of the Financial Markets Supervision Act (Wft). Placing orders on Lendahand's website is therefore an AFM regulated activity. Lendahand also meets its minimum capital requirements of EUR 125,000 following its license as required by De Nederlandsche Bank (DNB).
Lendahand uses an exemption from an approved prospectus that is available up to EUR 5 Million per year.
How safe are my personal details?
We adhere to strict safety requirements with regards to private and payment details. All sensitive data is sent through an encrypted connection (https). Also, data is stored (encrypted) in a secured facility provided by AWS: the world largest hosting service. Customer documents can only be retrieved by a secured connection and multi-factor authentication.
What happens if the local currency devaluates?
Our local partners and Companies bear the exchange rate risks. We settle the loan, redemptions, and interest payments in euro.
Does Lendahand use a third foundation fund?
What happens with my money if Lendahand goes bankrupt?
If Hands-On BV (containing the brand name Lendahand) would go bankrupt trades between Lendahand and payment service provider Intersolve EGI would cease immediately. Intersolve will then transfer the funds in your personal wallet to your bank account (Note: if at this time the project you have invested in has been fully funded and the money has thus been transferred to the local partner, these funds will not be transferred back to your bank account). Intersolve will then in consultation with a trustee handle all repayments between the investors and investees up until the final repayment of the last project has taken place.
Additionally, Lendahand is part of the investor compensation scheme (ICS). This scheme aims to compensate individuals and small businesses who have trusted money and or financial instruments (such as notes or options) to a licensed bank, investment firm or a financial institution in case the financial firm is unable to meet its obligations arising from claims related to the investment service (in other words, if Hands-On BV is not keeping track of the acquired notes by investors in the Wge depot correctly). The ICS guarantees an amount of up to EUR 20,000 per individual. For more information, go to www.toezicht.dnb.nl/en/2/50-202210
Why is my money going via Intersolve EGI?
What happens when a local partner goes bankrupt?
About Spartan Impact Finance
|Equity / total assets||16.90%|
|Write-off ratio last 12 months||0.00%|
|% investment amount in arrears (>90 days)||34.00%|