Section 12J is a relatively new piece of legislation introduced in 2009 into the income tax act as a tax deduction offered to incentivise SA taxpayers to invest in the local economy (see blog S12J - the basics).
This is not a concept unique to SA as a similar programme has been running successfully in the UK since 1994 and is still operational today (VCT Scheme in the UK). There are 2.5 million SME's in South Africa with a credit gap of more than R86 billion. This means that our SME's are struggling to get enough finance from traditional sources in order to respond to market demand and grow their businesses. At a core level Section 12J is keeping local capital onshore through the tax deduction and in turn providing much needed finance/assets directly into the backbone of the South African economy.
Helping businesses grow and creating jobs
What we offer at Sunstone Capital is a more cost effective and administratively simple way for SME’s to get the assets they need to grow their business. We provide a rental solution offering them an attractive alternative to traditional hire purchase agreements, we have seen fantastic results both from our investors and our investees.
"Since we partnered with Sunstone Capital we have grown our market presence by 15% and have been able to hire a new team to specialise in the flighting of our boards.
We appreciate the support of Sunstone Capital in helping us take our business to new heights."
Ride hailing partners:
"Through our partnership with Sunstone Capital and EasyEquities, we're giving South Africans a chance to fund the small business dreams of deserving drivers while benefitting from a full tax deduction and earning passive income."
Commercial fleet partners:
"Running our business requires a lot of admin, the flexibility and responsiveness of the Sunstone team has made our vehicle acquisition process significantly smoother."
"I love the stability and low risk profile that Sunstone Capital offers, that is why I just invested for the second year in a row!" - S Govender
What we really like about our investment strategy is that we maintain ownership of the assets, ensuring security and liquidity at the same time as we support the growth of SME's.
While we don’t have the most aggressive risk and return profile, we are happy to earn stable and dependable monthly rentals, allowing for a secure and attractive dividend yield, which is enhanced by the tax benefits.
To invest in our current capital raising window, which closes on the 29th Feb 2020, click the button below.
Fund Manager - Sunstone Capital
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