In order to promote black participation in the economy, government has since the late 1990s, introduced various economic interventions, like the well-known black economic empowerment (now broad-based), affirmative action and employment equity act, all in an effort to uplift black businesses.
We take a look at the little known, Black Business Supplier Development Programme (BBSDP), and examine how black-owned SMEs benefit from it.
What is the BBSDP?
The Black Business Supplier Development Programme is a cost-sharing grant or a matching grant offered to black-owned small enterprises.
The programme was introduced 14 years ago as one of a number of financial incentives under the Department of Trade and Industry. It is aimed at assisting black-owned small enterprises to improve their competitiveness and sustainability.
The programme provides grants to a maximum of R1 million.
The cost–sharing grant given to businesses is calculated on a 80:20 ratio for enterprise support services (business development and training support service) and 50:50 for tools and machinery.
– Business development services and training – The maximum grant is R200 000. Approved enterprises contribute 20% towards the necessary costs.
– Tools, machinery and equipment – The maximum grant is R800 000. Approved enterprises contributes 50% towards the necessary costs.
The focus is on formal black enterprises that have a valid tax clearance certificate and have the potential or capacity to supply goods and/or services to the general public, the public sector or private sector corporations, on a sustainable basis.
Therefore, eligible businesses must be predominantly black-owned and have a predominantly black management team. Other qualifying criterion include businesses that have been operating and trading for at least one financial year, are registered with the South African Revenue Service (SARS) for VAT and have R250 000 to R35 million turn-over per year.
Exclusions and limitations
Excluded from the grant is working capital, office equipment, furniture and computer hardware costs, land and buildings, long-term training programmes, marketing materials, and vehicles.
Eligible enterprises are, however, not permitted to apply for funding for the same intervention more than once.
How to apply?
BBSDP grants are subject to the availability of funds. Interested applicants apply through an accredited Network Facilitators who assist with completing and submitting the application.
Network Facilitators are independent contractors who act as honest brokers between the dti and black enterprises seeking assistance under BBSDP.
They assist enterprises in completing BBSDP application, conducting company diagnostics before submitting an application, ensuring that the applicant complies with mandatory requirement of BBSDP. They also provide oversight and monitoring over the programme.