FREE GUIDE

The Ultimate Guide to Government Funding for South African Entrepreneurs

Finding funding for your company may seem like a mountain that’s impossible to climb, luckily there are a number of funding options provided by the South African government that can give you the helping hand you need. If you’re looking for funding for your business or start up, this is the guide for you.

Government Funding Guide
In this guide, you'll learn:
  • What you need to apply for government funding
  • What are the different types of government funding
  • How to choose the right government funding option
  • Where you can apply for government funding
  • Commonly used government funding terms

What you need to apply for government funding

Government Funds and Grants each have their own entry criteria, however the following will be needed by most:

Hot Tip🔥
Contact the fund to check you have all the correct documents before applying. Incorrect documents and information can cause unnecessary delays.

What are the different types of government funding

Government funding for South African entrepreneurs mainly comes in the form of Grants and Funds. This is a breakdown of the most popular types:

How to choose the right government funding option

Here are some questions you can ask yourself to see which government funding options are right for you and your business.

  • How much money do you need?
  • When do you need the money?
  • What will the money be used for?
  • What types of funding options would you accept?
  • Can you meet the minimum requirements for the fund?
Hot Tip🔥
If you're reading this guide, that means you either run your own company or are interested in starting one. Govchain helps South African entrepreneurs to start and manage their businesses from one easy-to-use platform.
Govchain
Govchain makes it easy to start and manage a company in South Africa.

Where you can apply for government funding

Small Enterprise Finance Agency (SEFA)

SEFA’s Direct Lending products are loans that they provide directly to Small and Medium-sized Enterprises as well as Co-operatives operating in all sectors of the economy. The loans range from a minimum of R50,000 to R15 million.

SEFA’s Wholesale Lending products provide facilities (debt/equity) to intermediaries, joint ventures, partnerships (Specialised Funds) and other collaborative relationships. They focus on the following target markets:

  • Survivalists and microenterprises – loans between R500 and R50,000
  • Small Enterprises – loans between R50,000 and R1 million
  • Medium enterprises – loans between R1 million and R15 million
  • Amount of Funding: R500 - R15 million
  • Type of Funding: Loan
National Youth Development Agency (NYDA)

The NYDA Grant Programme is designed to provide young entrepreneurs, between the ages of 18 and 35, with an opportunity to access both financial and non-financial business development support in order to enable them to establish or grow their businesses.

The NYDA Grant Programme operates through a micro-finance Grant provision system, which, unlike a loan, means it doesn’t need to be paid back. The Grants are available to individuals, co-operatives and Community Development Facilitation Projects.

The NYDA also offers non-financial support to young entrepreneurs through the means of mentorship, business consultancy services, market linkages and business management training programmes.

  • Amount of Funding: R1 000 - R100 000
  • Type of Funding: Micro-finance Grant
Isivande Women’s Fund (IWF)

The IWF is an exclusive fund that aims to accelerate women’s economic empowerment through affordable, usable and responsive finance. The IWF focuses on majority female owned companies with assistance in start-up funding, business expansion, business rehabilitation, franchising, and bridging finance.

If you own a company that is majority female owned and you’re looking for funding between R30,000 to R2 million, this fund could be of interest to you. One thing worth noting with this fund is that it’s only for companies that have been operating for at least 6 months. So if your company has yet to start, you may have to look for another option.

  • Amount of Funding: R30 000 - R2 million
  • Type of Funding: -
Black Business Supplier Development Programme (BBSDP)

The Black Business Supplier Development Programme (BBSDP) is a cost-sharing Grant offered to Black-owned small enterprises. This means that they will pay a portion of the sum needed, while you must pay the rest. The aim of BBSDP is to fast-track existing Small, Medium and Micro Enterprises (SMMEs) that show promise and help integrate them into the mainstream economy.

The programme offers Grants up to the value of R1 million. These form as the following:

  • R800,000 for tools, machinery and equipment on a 50:50 cost-sharing basis; and
  • R200,000 for business development and training interventions per eligible enterprise to improve their corporate governance, management, marketing, productivity and use of modern technology on an 80:20 cost-sharing basis.
  • Amount of Funding: R100 000 - R1 million
  • Type of Funding: Cost-sharing Grant
iMbewu Fund

The iMbewu Fund is designed to support Black entrepreneurs wishing to start new businesses as well as support existing Black-owned enterprises with expansion capital.

  • Amount of Funding: R250,000 - R15 million
  • Type of Funding: Debt, quasi-equity and equity finance
Women Empowerment Fund

The NEF Women Empowerment Fund is designed to provide funding to businesses owned by Black women. The funding starts from R250,000 to R75 million across a range of sectors, for start-ups, expansions and equity acquisition purposes.

  • Amount of Funding: R250,000 - R75 million
  • Type of Funding: Debt, equity and mezzanine finance
uMnotho Fund

The uMnotho Fund has a few different products with funding ranging between R5 million to R50 million, however the product best suited for new business ventures is called the New Venture Finance product.

  • Amount of Funding: R5 million - R50 million
  • Type of Funding: Debt, equity and mezzanine finance
Industrial Development Corporation (IDC)

The Industrial Development Corporation funds entrepreneurs starting new enterprises and supports companies that want to extend existing operations. To qualifying companies they offer up to R1 billion in funding.

It’s important to note that the IDC excludes applications for funding of less than R1 million.

The industries they prioritise are as follows:

  • Agro-Processing & Agriculture
  • Chemical Products & Pharmaceuticals
  • Basic & Speciality Chemicals
  • Clothing & Textiles
  • Heavy Manufacturing
  • Light Manufacturing
  • Media & Audio Visuals
  • Machinery & Equipment
  • New Industries
  • Tourism
  • Automotive & Transport Equipment
  • Industrial Infrastructure
  • Basic Metals & Mining
  • Amount of Funding: R1 million - R1 billion
  • Type of Funding: n/a

Commonly used government funding terms

Next Steps

These are just a few options available to South African entrepreneurs looking for funding, so depending on which of these options suit you best, all you need to do is get the correct documents together and apply.

Hot Tip🔥
Regardless of what stage your company is in, it's always important to remain compliant. We built Govchain to help entrepreneurs keep their companies compliant in the simplest way possible. So, whether you're new on the market or have yet to start – check out how Govchain can help your business today.
Govchain
Govchain makes it easy to start and manage a company in South Africa.