Emerging transport operators who need finance for assets and working capital stand to benefit from a finance package offered by DaimlerChrysler, the Industrial Development Corporation (IDC) and the National Empowerment Fund (NEF) who collectively have committed R330 million to the finance fund.

The product was developed after DaimlerChrysler Financial Services (DCFS) found that there was a funding gap for emerging transport entrepreneurs. Many operators had a lack of working capital, inadequate skills and knowledge of transport and logistic issues and were unable to raise asset finance. Easier access to finance became a deciding factor when purchasing a vehicle. Although large companies try to close the gap with owner-driver schemes, there remains a need to develop the entrepreneurs in the sector.

Aluwani Ramabulana, strategic business development director at DCFS says, “While similar products have been developed by other financial institutions, we are offering an integrated solution for our customers.” This means that a customer:
• purchases the vehicle from one of the DamilerChrysler brands for example Mercedes-Benz Commercial Vehicles, Freightliner or Mitsubishi Fuso;
• the vehicle is financed and insured by DCFS;
• the IDC provides 50 percent guarantee on potential losses;
• the NEF provides working capital to the value of 10 percent of the finance transaction; and
• debis Fleet Management (dFM) offers services such as tracking and/or fuel and maintenance management.

Product features include:
 It is targeted at black emerging transport entrepreneurs who require trucks and buses as well as existing contractors who seek black economic empowerment partners and the benefit of that partnership
 The company must have 50 percent black shareholding
 At least one shareholder must be actively involved in the day-to-day running of the business
 The company must have a bankable business contract direct from the principal (contract giver)
 A minimum of two vehicles must be financed through this package
 A maximum of R30 million can be financed per transaction
 The finance period cannot exceed 60 months.

Gert Gouws, chief financial officer of the IDC explained, "The IDC recognises the positive contribution this product will make to developing emerging transport entrepreneurs and the growth of more owner-driven businesses where the potential for creating new job opportunities is greater. This is in line with the IDC's “Leadership in Development” strategy where we seek to stimulate the creation of jobs by funding opportunities that promote entrepreneurship, BEE and SME development.

"We are focused and dedicated to nurturing and supporting the development of South African industry and to building partnerships in aid of stimulating a competitive economy. This product lowers the barriers to entry for entrepreneurs and enables emerging transport entrepreneurs to access funding where less capital outlay is required and with flexible VAT repayment terms," concluded Gouws.

All partners of this project agree that transfer of skills is a requisite to improve probability for contracts and operators to succeed in the long-term. Frencel Gillion, Chief Investment Officer of the NEF says, “Often we see new businesses fail only because the owner has insufficient business management experience. We have a pool of possible management companies that the customer can hire to assist with these and other issues. The loan we provide for working capital can be utilised for this purpose as well. This type of support is aligned to our vision of encouraging and promoting investments, savings and meaningful economic participation among black people.”

Depending on the customer’s requirements, DCFS will facilitate the appointment of a management company to assist the customer with various business management issues for example tax issues, assist in market planning, bookkeeping, recruiting and assessing drivers and negotiating rates.

DCFS piloted the product before approaching the IDC and NEF to participate. During that phase the company finalised owner driver contracts worth more than R120 million and concluded BBBEE contracts in excess of R50 million to emerging SME operators – even before they commenced a sales drive with dealers.

Ramabulana says, “This is a start of an exciting journey for us. With the two new partners, we expect increased product penetration. This is the future BBBEE and business in South Africa, where enterprise development will play a more prominent role. This product offers blue chip companies an enterprise development solution aimed at their emerging transport and logistics service providers, thereby assisting them in optimising their BBBEE score card.”

Customers who would like to take up with offer can call 0861 DAIMLER (324 653).