The South African government has many agencies that provide funding to businesses. One of its many agencies is the Small Enterprise Development Agency (SEDA). SEDA was developed by the government to help micro and small businesses grow, become commercially viable, profitable and create employment.
SEDA has a wide range of funding instruments including loans and grants. These loan options are available to all businesses in any sector; however, the main focus of the organisation is small businesses.
If you are looking for SEDA funding, you might want to look at SEDA’s grant options. Grant funding is financial support in the form of a non-repayable component for new and expanding businesses.
In this article, we look at SEDA grant funding and show you what you need to apply for it.
What is SEDA Funding?
As explained above, SEDA provides funding for micro and small businesses. The government agency offers loans and more importantly, it offers non-repayable grants to businesses. The reason the grants are non-repayable is that SEDA seeks to help micro and small businesses grow and in turn, grow the economy.
Beyond its funding instruments, SEDA also provides comprehensive business support to these micro and small businesses. SEDA offers the following business development services:
- Information, referrals and advice for small businesses.
- Tender information and advice to tender-focused businesses.
- Import and export business training.
- Trade information.
- Business assessments and mentoring.
- Technical business support.
- Access to markets.
- Business linkages.
- Business plan development support.
As you can see SEDA provides an all-round support system for new business owners. The organisation also has a strong focus on youth and women-run businesses.
SEDA Funding Requirements
Businesses that require funding from SEDA need to be tax-compliant and registered. Additionally, they need to have an annual turnover of less than R 50 million.
SEDA funding application requirements include:
- Your business must be owned and operated by South Africans.
- Your business must be registered with the Companies and Intellectual Property Commission (CIPC).
- You must comply with the South African Revenue Services (SARS).
- Your staff must be 70% South Africans. If you have non-South African employees, they must hold valid work permits from the Department of Home Affairs.
- Attached to your funding application must be a comprehensive business proposal. The business proposal must follow the guidelines set out by SEDA on its online application.
If you have all the required documentation, you are able to start applying for SEDA grant funding programmes.
Note: Applying and getting funding from SEDA can take up to six weeks. SEDA funding is not only for micro and small businesses but is also available to entrepreneurs with potential business ideas.
SEDA Grant Funding Programmes
SEDA has a wide range of funding and business support programmes. First, let’s look at the grant programmes available for micro and small businesses.
Cooperative Incentive Scheme
SEDA is in charge of the administration of the Cooperative Incentive Scheme (CIS). The programme is designed to help cooperatives from the textiles, services, energy, agriculture, print, film and video production, consumer and housing.
The purpose of this programme is to increase the number of cooperatives in townships and increase the number of cooperatives supported through supplier development programmes.
The maximum grant amount offered to each cooperative is R 350 000.
If your application is successful, your cash grant can be used to obtain services to help grow your business. To qualify for the CIS programme, you need to meet the following requirements:
- Your business must be mainly black-owned.
- You must be actively working to create employment and overcome poverty.
- Your business must be registered as a cooperative according to the Cooperatives Act, 14 of 2005.
- Attach a business plan to your application.
- Provide quotations for the services that require funding.
Supplier Development Programme
The supplier development programme is a cost-sharing scheme aimed at black-owned businesses. The programme seeks to improve the core competencies and management abilities and allow them to become more competitive.
Through this programme, businesses get access to promotional marketing materials, software development and other interventions such as quality, processes and product improvements.
The maximum grant amount for this programme is R 100 000. To qualify for this programme, you need to meet the following requirements:
- Your business must be majority black (51% or more).
- Majority of the business managers must be black.
- Your annual turnover must be less than R12 million.
- Your business must have a trading history of at least one year.
- You must have registered your business with the CIPC and SARS.
Note: For the supplier development programme, you need to attach your tax clearance certificate to your application form. Ensure that you also follow the application guidelines set by SEDA.
These are the two SEDA programmes which provide grant funding to micro and small businesses. Other SEDA programmes such as the Township and Rural Entrepreneurship programme, SEDA Technology Programme and the Tourism Technology Grassroots Innovation and Incubation Programme provide business support and loans to businesses.
Apply today to the SEDA programmes that best fit your needs and get your business off the ground! Don’t waste time, your business idea could solve a lot of problems that your potential customers have.
For more information on government funding programmes, read our guide. For actionable business help, visit SME Advice to speak to one of our experts.
