What is Spartan’s Open ESD Fund?

Our Open Fund for Enterprise & Supplier Development is specifically made to cater for corporate businesses looking to improve their Enterprise Supplier Development in a more financially efficient manner.

By making an up-front investment into the LEAD Enterprise & Supplier Development Fund, corporates can convert their Enterprise and Supplier Development (ESD) spend from an annual expense into a once off investment. The Fund’s costs will be covered by interest earned on a portfolio of commercial unlisted loans made to qualifying supplier development investments. The underlying investments of the Fund are made with the explicit goal of complying with the aspects of the DTI Generic B-BBEE scorecard in so far as it relates to ESD.

The Fund is administered and managed by LEAD Impact Capital (Pty) Ltd, a registered FSP (Licence no. 50498). LEAD has developed a fully outsourced solution to achieve compliance with the Enterprise and Supplier Development (ESD) requirements of the B-BBEE Codes. Measured entities are now able to convert their ESD contributions from an annual income statement expense/donation into a once off-balance sheet investment that delivers the following benefits:

  • Make a once-off investment instead of annual expense
  • Investment is on the form of a 27four Life endowment policy (sinking fund) for 5 years
  • Once-off investment automatically qualifies for immediate & annual BEE points under ED and/or SD
  • The Fund targets preservation of capital over time
  • This is achieved by making commercial secured loans
    to the underlying investee companies
  • These investment portfolios are administered by 27four Life,
    a registered long-term insurer and an authorised financial services provider
    in terms of the Financial Advisory and Intermediary Services Act (FAIS Act)
    FSP licence number 44077
  • The asset manager is LEAD Impact Capital (Pty) Ltd and is Cat II FSB licenced (No 50498)

Spartan’s core business is financing only SMEs. This naturally aligns with certain aspects of the B-BBEE codes – specifically around Enterprise and Supplier Development.

What we do NOT do – training & development nor business development support (BDS) nor incubation. We do, however, have a strategic alliance with a leading service provider in this area.

Why use Spartan for your ESD …

Technical Summary …

  • Investors will be issued with a 5 year sinking fund policy administered by 27four Life
  • The investment has a minimum 5-year term where no full or partial withdrawals may be made
  • After 5 years policy holders have the option of extending their investment on an annual basis or providing 90 days’ notice requesting withdrawal

In terms of income tax legislation 27four Life are required to pay income tax and capital gains tax (CGT) at a rate which depends on how the investor is classified (eg. a natural person, company, or an untaxed policyholder).

Trusts are taxed according to the classification of the beneficiary. Income tax is incurred and recovered from the policy when income distributions are made and tax is levied on any capital gains that may arise.

This means that on the sale of units to pay a benefit from the policy, the benefit may be reduced by a provision for CGT. Any sale of units to pay fees or charges or a sale of units to effect a switch from one unit trust to another may create a CGT liability which will be recovered from the policy benefit when it is paid out.

Open ESD Fund benefits …

  • B-BBEE Compliance: Investors will receive the documentation necessary for attaining compliance with the ESD requirements of the Codes

  • Creation of shareholder value: Investors convert their ESD spend from an annual income statement expense (i.e. a grant or donation) to a balance sheet asset that retains value

  • Maximum Impact: Investors have access to an ESD solution that delivers shareholder value alongside social value, with 100% of their contribution (after fees) reaching the ESD beneficiary

  • Collective Approach: Investors are part of a solution where the collective is vastly more powerful than the individual parts and that 1+1 can indeed be >2

  • Risk Sharing: Investment risk is shared among multiple investors

  • Alignment with B- BBEE Codes: The Fund mandate is in complete alignment with spirit and transformation objectives of the B-BBEE Codes

  • Outsourced Solution: Fully outsourced solution frees up management to focus on their core business

  • Regulated investment product: LEAD Impact Capital (Pty) Ltd is a registered FSP (Licence no. 50498) and 27four Life is a registered long term insurer

A regulated investment …

LEAD Impact Capital (Pty) Ltd (2019/381577/07) is licensed by the FSB as a Category 2 Financial Services Provider #50498

What some of our entrepreneur clients say …

“you got a big brother literally backing you – they say ‘financing that backs entrepreneurs’ and they really do”

Tshidi Mndzebele, CEO AvenirHoldings

“the ability to finance … allowed us to have more capital available to hire more teachers”

Damany Gibbs, CFO at Nova Pioneer

“I definitely feel like I am being backed…  I’m not afraid of anything, if there are any new contracts I know they are a phone call away.”

Chithwa Samuel Ndwandwe, MD Sinqobile Equestrian Security

ready to get started?

complete this quick form and we'll get right back to you ...

Contact Us