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Government grants and funding are a great source of finances when youre trying to get
your business off the ground or expand to new horizons.
A small business can on average employ 12 people. The drop in entrepreneurial activity
over the past five years is equal to 2.3 million possible job opportunities lost. Small and
micro business sectors are the main source of real employment in the economy.
Two simple measures that would go a long way to support and develop entrepreneurs is
access to finance and improvement of logistics.
www.entrepreneurmag.co.za 1
Government Funds
The government created government funding to extend finances to previously disadvantaged
South Africans in order to develop black economic development. Your much needed capital
investment could come from government funding opportunities.
Financing a small business, whether youre starting-up or trying to expand, is a challenge all
entrepreneurs go through. Here are a few examples of government funding that focuses on
black entrepreneurs:
2. uMnotho Fund:
This NEF funding has subdivisions in finance, new venture finance, expansion capital,
capital markets, and liquidity and warehousing.
This fund is available to black entrepreneurs who manage or own businesses, new
ventures, expanding existing business. It is also available to black entrepreneurs who
want to buy a share of equity in black and white owned businesses.
The contributions from this fund range from R2 million to R75 million.
4. Strategic Projects:
This NEF fund has subdivisions of empowerment objectives.
The aim of the government fund is to increase black participation in early-stage projects.
These projects need to have economic merit and the ability to deliver on the governments
development mandate.
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How Can You Apply for NEF Funding?
NEF funding is available for start-up and existing businesses. It will conduct the following
processes when evaluating your business:
1. It will conduct a, self-needs analysis to determine how the NEF funding can assist your
businesses needs and which offer is best suited.
2. You will need to provide an application form and a comprehensive proposal with evidence
that supports the commercial viability and financial position of your business.
3. After youve submitted your application to the NEF, it will assess your information for final
approval and receiving of funds.
4. The NEF website offers the following checklist to ensure you include everything needed
when applying for funding.
5. Youll need to meet all the requirements or your application wont be successfully
considered.
6. This process can take up to six weeks.
7. If your application is successful, it could take up to three to four months to receive NEF
funding.
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the total assets are below R5 million, annual turnover is less than R13 million, and the
business employs less than 50 people.
The fund intends to promote innovation and technology development with financial
support.
This enables the development of new products and/or processes.
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1. Bridging loans
These are short-term loans, which provide working capital.
The types of working capital offered by this government fund include stock purchases and
operating overheads. This loan is offered for only one year.
2. Term loans
This government fund is a loan of a specific amount and has a specified repayment schedule,
amount and interest rate.
This type of SEFA funding is normally used to finance your assets that have a medium to
long-term lifespan, for example machinery, vehicles, office equipment.
Term loans can be used to expand your business or for acquisitions.
This loan has a repayment range of one to five years.
3. Structured finance
Use this SEFA facility for funding that falls outside the parameters of the term and bridge
loans.
Provided by a debt facility, it can be repaid over a period of five years and tailored to your
unique requirements.
The following businesses cant apply from the benefits of this fund: Liquor, tobacco, gambling,
sex trade, armaments, speculative real estate, leveraged buy-out funds, and illegal trade.
This includes any business activity that would tarnish SEFAs reputation, political organisation,
entrepreneurs under debt review, insolvent business owners and business.
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4 The Isivande Womens Fund (IWF)
This government fund aims at accelerating womens economic empowerment
by supplying cost effective, user friendly and responsive, available finance.
The IWF offers support services to improve the success of your business.
It targets business that are starting up, expanding, rehabilitating, franchising
and those that need bridging finance. The aim of the fund is to create self-
sustaining black and women owned businesses by offering you primary
financial and non-financial support.
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6 Black
(BBSDP)
Business Supplier Development Programme
The Black Business Supplier Development Programme (BBSDP) is
a cost-sharing grant that offers black-owned businesses improve
their competitiveness and sustainability.
This government grant does not support start-ups, only the
expansions of existing business.
The aim of this government grant is to fast-track small and micro-
enterprises, encourage links between black-owned businesses,
corporates and public sector as well as to complement affirmative
procurement and outsourcing.
It provides black entrepreneurs with a grant to a maximum of R1
million.
To apply you will need to email all your documentation, all your documents need to be in a PDF
format except your application form, which needs to be in word format. Please send them as
individual documents.
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7 Incubation Support Programme (ISP)
Designed to create and develop successful enterprises. These are enterprises with the ability to
revitalise communities and local economies.
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8 National Youth Development Agency (NYDA)
This government grant is moving away from grants for youth and
shifting towards mentorship and development programmes. Grants
are however, still available for youth entrepreneurs.
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