Lack of funding is arguably the biggest challenge that small to medium enterprises (SME) face. Economic research shows that many new and old small businesses go through the struggle of finding capital to start small businesses or even expand them. Here are some incentive schemes provided by the Department of Trade and Industry which provide entrepreneurs with a much needed financial boost.
Incubation Support Programme (ISP)
Incubation Support Programme (ISP) is a fund which has been made available for incubators that can generate revenue through the provision of services and initiatives and be self-sustainable. With the funds lifespan set between 1 September 2012 to 31 March 2022, the ISP encourages partnerships in which big business assists SMEs with skills transfer, enterprise development, supplier development and marketing opportunities. ISP boasts of a R10 million maximum total grant fund. This grant is capped at a maximum of R10 million (VAT inclusive) per financial year over a three (3) year period; subject to the availability of funds.To qualify, applicants must be operating as legal entities in South Africa.
Black Business Supplier Development Programme (BBSDP)
Black Business Supplier Development Programme (BBSDP) is a non-repayable grant to a maximum of R1 million which is divided into two sub category amounts. Out of the R1 million, R800,000 is allocated for the acquisition of business tools, machinery and equipment while R200,000 is allocated to entrepreneurs to improve their corporate governance, management, marketing, productivity and use of modern technology. This grant has been set up for entrepreneurs in the hospitality industry. In order to qualify, enterprises must be black-owned and have been operating and trading for at least one year with a turnover of R250 000 to R35 million per annum.
Co-operative Incentive Scheme (CIS)
Co-operative Incentive Scheme (CIS) has been designed to promote emerging co-operatives through the provision of a matching grant, assist co-operatives to acquire their start-up requirements and build an initial asset base. CIS maximum grant is R350,000 and favours rural and semi-urban based women, youth and people with disabilities. To qualify, a Co-operative must be registered in South Africa in terms of the Co-operatives Act of 2005 and be in need of commercial vehicles, electricity or boreholes.
The SME financial incentives listed above should provide much needed business finance.