Benefit from SA’s grants
GOVT FUNDING: GET ALIGNED
To access the dti’s financial incentives your business/project must align with government’s economic development plan.
Entrepreneurship has many challenges, but none is more detrimental and difficult to overcome as funding. Ironically, there are more funding mechanisms today than at any other time in history. There are more banks, more venture capital firms, more crowdfunding and more angel investors and yet entrepreneurs still find it difficult to secure adequate funding. However, it is equally possible that there are more entrepreneurs today than ever before.
Nonetheless, be it in the start-up or expansion phase, funding remains an issue for most entrepreneurs. But there is a funding mechanism that most entrepreneurs do not consider: government grants.
Government grants are funds that are given to projects or businesses that fall within the scope of a government’s strategic economic development plan. Basically, every country has a strategy to grow its economy and it does so by targeting key areas within its economy which would aid or accelerate its endeavours. One of the more common implementation strategies used is to fund businesses and projects that are aligned to its economic development strategy.
The South African government is no different and uses this same implementation strategy in an attempt to achieve its economic goals. In that regard, the Department of Trade & Industry (dti) is the administrator of government grants. If you were to visit the dti website (www.thedti.gov.za) you would find information and a list of all the grants that are currently available. Key to note is that the dti does not refer to them as grants, but rather as financial incentives or incentive schemes. This is due to the fact that not all grants are funds given to you – some are beneficial incentives such as tax allowances on tax-deductible income.
How can you benefit from the dti’s financial incentives?
The foremost requirement is that your business or project must align with the government’s economic development plan. That is to say it must be within key sectors in the form of selected industries such as the automobile, agri-processing and information and communication technology sectors, or be aligned with economic policy, such as broad-based black economic empowerment, rural development and critical skills development.
A thorough assessment of your business is therefore required to determine eligibility. If you determine that you meet the requirements, you must ensure that your application is ready for submission within the window period allocated for submissions, as a request for application (RFA) is not open all year round.
Investopedia defines a RFA as “a type of solicitation notice in which an organisation announces that grant funding is available”.
After submission there is a lengthy adjudication process which can last months at a time. But I am sure most entrepreneurs will not be too concerned with waiting for interest-free, non-repayment financial incentives.
Munya Duvera is CEO at Duvera Elgroup