Ben­e­fit from SA’s grants

GOVT FUND­ING: GET ALIGNED

The Citizen (Gauteng) - - BUSINESS - Munya Du­vera

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

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