Have you caught the entrepreneurial bug? Are you tired of having someone else write your pay check?
Maybe you are on the verge of starting your own business, or you have built one already but you need funding to push forward and succeed. Getting money is one of the hardest parts. Nothing worthwhile comes easy right? I’m here to say consider applying for government funding.
Yes, people are the most important assets for any business. But to take care of the people you need capital. You do not always have to think about traditional institutions such as banks when you are trying to get money.
Government funding can also be a solution to your financial problems. It is a crucial method through which our government promotes the expansion and long-term viability of small businesses. Do not sleep on the opportunity.
Because small businesses are so important to our society, the government has made promoting and developing small businesses a top priority in an effort to lower the percentage of SME failure and support small business growth.
We cannot, however, turn a blind eye to the fact that there are some big government funding challenges. One of them is the community of small businesses lack of access to knowledge of the numerous financial options accessible to them.
To try and tackle this issue, I am going to take you through some of the best government funding agencies to get your business off the ground.
Here is a list of government agencies that provide financial and non-financial support to qualifying enterprises:
1. Industrial Development Corporation (IDC)
The IDC is a national development finance organisation created to support industrial and economic development. They provide loans with a minimum of R1 million and a maximum of R1 billion for each project.
Government funding through IDC includes:
- The Green Fund intends to increase the energy efficiency of South African SMEs and the country’s green economic growth.
- In energy-intensive industries including manufacturing, mining, and agro-processing, the Green Energy Efficiency Fund (GEEF) assists entrepreneurs and companies who want to invest in energy efficiency and renewable energy technologies.
- The Agro-processing and Agriculture Strategic Business Unit (SBU) makes investments in the growth of initiatives and enterprises that either increase or add to the local manufacturing capacity.
2. Small Enterprise Finance Agency (SEFA)
Many SMEs and cooperatives across the country receive financial and business help from Sefa, advancing the growth of current businesses or the creation of new businesses.
Government funding through SEFA includes:
- In an effort to revive a sector destroyed by COVID-19, the Tourism Equity Fund offers grants or debt financing for businesses operated by black women and disabled entrepreneurs.
- The Amavulandlela Funding Scheme is designed solely for entrepreneurs with disabilities.
- The Youth Challenge Fund (YCF) is a youth start-up assistance programme designed to encourage the creation and expansion of youth-owned firms, advance digital literacy, boost the economy, and support job creation.
3. Small Enterprise Development Agency (SEDA)
SEDA believes small businesses must be developed, supported, and promoted nationwide to ensure their viability and further growth.
Government funding through SEDA includes:
- The National Gazelles program, which is a component of the government’s initiatives to support the country’s SME sector, aims to create high-growth companies that will help reduce the country’s rising unemployment and boost the economy.
- The Seda Technology Programme (Stp) oversees providing excellent support services for small businesses in particular areas, such as ICT, aluminium, platinum, and biodiesel, as well as financial and non-financial technology transfer.
4. National Youth Development Agency (NYDA)
The organisation provides cooperative grants for increased youth participation in the cooperatives sector as well as microfinance grants for sustainable youth entrepreneurship.
The funding programme’s goal is to give young entrepreneurs the chance to start their own enterprises with both financial and non-financial company development help.
Government funding through the NYDA includes:
The NYDA grant money ranges for any individual or youth cooperative from R1 000 to a maximum of R200 000. Young people who are interested in the grant programme must agree to spend at least two years taking part in the NYDA mentorship and voucher program. The programme includes pre- and post-approval support.
5. National Empowerment Fund (NEF)
By offering financial and non-financial support to black-owned firms and encouraging a culture of saving and investing among black people, the NEF is entrusted with fostering and supporting black economic involvement.
Government funding through the NEF includes:
- The NEF Women Empowerment Fund aims to speed up the financing of launches, expansions, and equity acquisition for firms owned by black women across a variety of sectors.
- The iMbewu Fund provides funds to current black-owned firms as well as assistance to black entrepreneurs looking to launch new ventures.
- The uMnotho Fund is designed to improve access to BBBEE capital.
6. Technology Innovation Agency (TIA)
According to the TIA Act 26 of 2008, the Technology Innovation Agency (TIA) was founded with the goal of promoting and accelerating technological innovation in order to enhance economic growth and the standard of living for all South Africans.
Government funding through the TIA includes:
- The Seed Fund grant is non-repayable and given to spin-off businesses based on IP from higher education institutions or initiatives being run within such institutions (some outsourcing to outside suppliers is permitted).
- The Technology Development Fund offers financial support for the development of technologies from proof of concept to technology demonstration.
- The Pre-Commercialisation Support Fund helps individual entrepreneurs—current or potential—as well as Small, Medium, and Large Enterprises (SMMEs) to secure funding for pre-commercialisation activities, such as raising production/service capacity to levels that will support operational sustainability.
7. Department of Trade, Industry, and Competition (DTIC)
The dtic and its affiliated organisations work to promote consumer protection, black economic empowerment, commercial law implementation, economic development, and international commerce.
Incentive Schemes:
- The Black Industrialists Scheme (BIS) attempts to accelerate black industrialists’ integration into the South African economy.
- The Export Marketing Investment Assistance Scheme works to export markets for South African products and services.
- By strengthening infrastructure, the Critical Infrastructure Scheme seeks to increase investment.
Remember, there are different types of government funding available to you. This includes grants, cost-sharing grants, incentives, tax incentives, as well as equity funding. With the right amount of research and knowledge, you will know which government funding to apply for and how well it benefits your business.