Capital is a requirement for most new businesses whether it’s needed to acquire stock and equipment, or pay salaries and rent. While there are many avenues available to small businesses looking to secure funding – including traditional lenders such as banks or private investment firms – most business owners’ first port of call when seeking financial support is the government. This is because the government is tasked with providing development funding to entrepreneurs.
One of the government agencies mandated to support and drive the growth of small businesses is the Small Enterprise Development Agency (SEDA) which is an agency of the Department of Small Business Development which provides funding and non-financial support to small enterprises and cooperatives.
Specifically, the agency has the mandate to “implement the national government’s small business strategy, design and implement a standard and common national delivery network”. Additionally, it’s responsible for integrating “all government funded small enterprise support agencies across all tiers of government”.
Of all the government agencies focused on small business development, SEDA has the biggest network of offices with 42 branches nationally and branches in each district municipality. The agency also has presence in some townships and rural areas.
Additionally, SEDA also supports technology incubation centres across the country. The total number currently stands at 121 of hubs with a focus on the digital space and digital incubators. The hubs provide various programmes and interventions which include training and mentorship programmes.
SEDA has a broad range of programmes and interventions, they include the following:
Small businesses in South Africa have to overcome many barriers to entry and challenges. SEDA has identified and is working to solve the main challenges that include, but are not limited to the following:
SEDA’s target market for funding and non-financial support covers small, medium and micro enterprises (SMME), including cooperatives. It also includes potential entrepreneurs with a business idea. In particular, their programmes target youth and women.
SEDA provides support for the following sectors:
The agency offers funding in the form of loans, grants, and relief options for various types of qualifying businesses in particular, micro and small enterprises (including co-operatives) from all sectors throughout the country.
There is also business support offered, including business related information, advice, consultancy, training and mentoring. Business development services include:
See Also: How to Access Funding For Your Business
All businesses can get access to SEDA funding and support, as long as it’s a micro or small business. Generally, they only fund tax compliant businesses with an annual turnover of less than R50 million.
Other requirements include:
SEDA is responsible for the administration of the Cooperative Incentive Scheme (CIS). The scheme helps cooperatives from all industries such as textiles, services, energy, agriculture, print, film, and video production, consumer and housing.
The CIS supports the growth of sustainable co-operative enterprises. The scheme is a 100% grant for registered primary co-operatives. The grant can be used for startup requirements and assets.
The maximum grant offered per co-operative entity is R350 000.
The purpose of the CIS is as follows:
Successful applicants are given cash grants to obtain services to grow their business. For a cooperative to qualify for a grant, it needs to fulfil the following requirements:
This programme offers grants in a cost-sharing scheme to black-owned businesses to improve their core competencies and management abilities, and enable them to become more competitive. Through the scheme businesses get access to promotional marketing materials, software development and other interventions such as quality, processes and product improvement. The maximum grant for which a single company can qualify is R100 000.
To qualify, businesses must be:
Application procedure: Obtain application guidelines and an application form. Complete the application form. Obtain and attach a tax clearance certificate, and submit the application.
The purpose of the TREP schemes aims to support informal micro and small enterprises in township economies. It provides dedicated business support to enterprises in rural and township areas, additionally, funding and business development opportunities to help them develop their businesses.
Scheme interventions include a one-stop-shop business support service, business incubation to help entrepreneurs develop their new ventures, business skills training programs, and product development support. Successful TREP candidates can also access a credit guarantee, access to funding including working capital, and a pitch-for-funding channel.
The following support programmes are available for qualifying entrepreneurs:
Qualification criteria
The implementing agencies for the scheme are SEDA and SEFA.
Find out if your business qualifies for TREP funding here: Township Business Funding Opportunities – TREP
Seda Technology Programme (Stp) provides financial and non- financial support to small enterprises through business incubation, technology transfer, and quality and standards services. It has an Incubation Unit, a Quality and Standards Unit (to assist SMMEs with quality control and assessment processes, as well as internal management and operation systems) and a Technological Transfer Unit (to assist SMEs with access to and use of technology or technological equipment). The target is potential and existing SME (small and micro) entrepreneurs in specific industries, such as in ICT, aluminium, platinum and bio-diesel.
The programme provides non financial support services in the following four categories:
Opportunities are also created for sharing sector-specific knowledge and skills for entrepreneurs, facilitating awareness and introduction to appropriate technology and intellectual property, peer-networking and forming of productive partnerships.
One of the programme’s objectives is to provide specific technology support to women-owned enterprises. These are enterprises with more than 50% women ownership.
Read more about this fund: SMEs Not Taking Full Advantage Of Tech Support Programmes
Funding for acquisition of technology through technology transfer fund up to a maximum of R 600,000.
This programme provides financial and non-financial support for businesses in the manufacturing, services, agriculture and ICT sectors. The objective of the programme is to promote quality and excellence as competitive tools for SMEs.
As part of the programme, businesses get a grand of R150,000 towards implementation Management System-ISO 9001: 2008 and testing & certification of products with SABS
Non-financial support services include capacity building on the different national (SANS) and international (ISO) compliance standards training for the sectors above.
Qualifying criteria to apply are:
This two-year programme supports tech-savvy entrepreneurs with the goal of inspiring innovation amongst enterprises in the travel and hospitality sector. To qualify for the fund entrepreneurs must have an innovative tourism tech-solution that they would like financed.
The target is women and youth between the ages of 18-35 in tourism business operations.
The programme aims to drive innovation among businesses in the travel and hospitality sector and to increase the sustainability of youth and women in tourism businesses, develop skills, as well as provide market access funding.
TTGIIP focuses on four key elements of business development, namely:
Moreover, SEDA runs the only government incubation programme. The key focus here is on administering the country’s business incubator programme – this includes designing incubation models, managing national incubation standards, market assessments aimed at feeding opportunities to the ecosystem, influence or direct private sector and government spending accordingly, monitoring and evaluating the entire system, to name a few.
SEDA supports 99 technology incubation centres across the country. Through incubation enterprises can develop skills, knowledge and markets, thereby nurturing them through the early stages of development and increasing their profitability and growth in the long run.
Qualifying criteria
Anybody with a viable business idea or any registered small micro and medium enterprise (SMME) that is struggling to grow can apply for an incubation programme.
Each of the Seda supported incubators has its own incubatee recruitment/selection process that is unique to their sector. Applicants must contact the relevant incubator for the recruitment criteria.
Examples of the types of incubators that SEDA supports is the Bakery and Food Technology Incubator which provides food technology and commercialisation services to all incubated bakery and food manufacturing enterprises. The Ekurhuleni Jewellery Project (EJP) provides incubation and technology transfer to emerging jewellers. Finally, the Savant is a commercially-focused hardware technology incubator based in Cape Town that provides bespoke business development support.