Finding the right funding to develop your business can be tricky especially for small to medium-sized enterprises (SMEs). Many funding opportunities have difficult qualifying requirements such as high turnovers and some require the funding to be paid back which can be hard for SMEs. The alternative to these types of funding instruments is business grants.
A business grant is an amount of money given to a business to help it grow and develop. Typically, the money is invested in training, equipment or entering new markets. The grants are awarded by the government or other companies and do not need to be repaid.
For SMEs to get the funding they need for development, business grants need to be a priority when they look for funding. Grants are the perfect funding instrument because they allow SMEs to receive the funding they need and focus on their development.
In this article, we look at business funding grants that are available in South Africa and how you can apply for them.
Types of Business Grants
In South Africa, two types of business grants are common, ones that cover all the costs and cost-sharing grants that only cover a portion of the required amount. Grants in South Africa are (usually) given out by the government, however, there are private companies that offer grants to small businesses.
The grants available in South Africa can be found on the websites of organisations such as the Industrial Development Corporation (IDC), National Empowerment Fund (NEF) and Technology Innovation Agency (TIA).
These agencies are just some of the ones that offer grants. We will explore them all later in the article.
How to Write a Business Grant Proposal
Because grants are not repaid, the application process is very important. You need to have a comprehensive proposal that accompanies the application. When writing a business grant proposal, keep the following points in mind:
- Write the proposal in plain English and avoid jargon
- Be specific about what you plan to do with the grant
- Show how your business meets the grant-qualifying criteria
- Be clear about what success looks like as a result of the grant
- Create clear aims and well-defined criteria for quantity success
- Provide evidence that your business is capable of delivering the work, as well as a return on the grant funder’s investment (if necessary)
- Make your budget as specific as possible
Writing a successful grant application is not an easy task, especially for new business owners. If you have the capital, you can employ a grant writer to do it for you.
Where to Apply for Business Grants
There are a lot of grants in South Africa (think hundreds) but the challenge for SMEs can be finding the right one. Some grants are industry-specific, and some are generic for all businesses in any industry.
If you are looking to apply for a business grant, consider the following options:
IDC
The IDC is a government development finance institution. The organisation was set up to promote economic growth and industrial development in South Africa. The IDC offers loans from R1 million up to R1 billion per project.
You can find out more about the IDC and its funding programmes in this article.
SEDFA
The Small Enterprise Development and Finance Agency (SEDFA) is a government funding institution. The organisation is a combination of its parent agencies; the Small Enterprise Development Agency (Seda), the Small Enterprise Finance Agency (SEFA) and the Co-operative Banks Development Agency (CDBA).
You can find out about SEDFA’s funding opportunities on their official page.
NEF
The NEF is a government organisation tasked with promoting and facilitating black economic participation. The NEF provides SME financial and non-financial support to black-owned businesses.
You can read all about the NEF and its funding instruments in our guide.
TIA
The TIA was established with the aim of stimulating technological innovation in South Africa. Through its programmes, the TIA works to improve the financial support and resources to entrepreneurs, startups and businesses working on various technology and innovation-driven projects.
To find out more about the TIA and its funding programmes, read our article.
DTIC
The Department of Trade, Industry and Competition (DTIC) provides SMES with funding and opportunities to level out the competitive landscape across various markets.
You can find out more about the DTIC and its funding programmes in our guide.
These are just some of the examples of government organisations that have grant funding programmes. Research all the opportunities, find the right one for you, prepare a comprehensive proposal and send in your application.