The Guide was originally produced to meet a need identified by the Mining Technology Services Action Agenda (MTSAA), which, during industry consultations carried out as part of the strategic phase of the MTSAA, determined that access to capital and finance was a key factor in the future success and sustainability of mining technology companies, a sector dominated by SMEs. Although the Guide was produced as a result of the MTSAA’s findings, it can equally be used by SMEs in other sectors. It is an introduction and general guide only, as there will be differences between SME needs, and there will also be differences in the products and the requirements of the different financial institutions, which will change as new financial products are developed.
hile this Guide has a greater emphasis on debt finance, those firms seeking equity finance will find that they will be required to provide similar information.
• Debt finance is essentially a loan, which has to be repaid with interest, and the borrower bears most of the risk if the business fails;
• Equity finance involves an investor putting funds into a business with the expectation of future earnings. They therefore share the risk, and in return gain some ownership, and possibly some control, of the business.
This Guide also provides an introduction to equity finance, and some of the issues surrounding this kind of investment. The various options for determining the most appropriate kind of finance should be carefully examined preferably with professional help.