A Guide to Non-Repayable Business Grants for Startups in South Africa

A business grant is a sum of money given to a company to aid in its expansion. This money may be used to fund equipment, training, or market expansion.

There are two types of business grants – those that cover 100% of the financial need, and cost-sharing grants that only cover a portion of the required amount.

The non-repayable grant does not imply that it is “free money.”  There are significant obstacles you must overcome to receive either partial or full financial support and stipulations on how the money can be used. You might, for example, undergo a training programme before receiving the grant.

Pros of government grants

• Grants do not need to be repaid.
• Once you’ve been awarded one grant, you’re more likely to receive others.
• Not only will getting one grant put you on the path to receiving another, but it will also increase your business’s visibility.

Cons of government grants

• You’ll have to do a lot of research and fill out a lot of paperwork if you want to apply for a grant.
• With thousands of small and online businesses vying for the same grants, be prepared for tough competition.
• Although grants don’t have to be paid back (in fees), they still come with plenty of restrictions and conditions.

What you will need to apply for non-repayable business grants

You must have a business grant proposal that will go with your application. The proposal will include an executive summary of your business, a “need” statement and basic company information.

Here is your list of must-haves in your grant proposal:

• Cover letter: The grant reviewer’s initial impression of your application will come from this document. It ought to include an overview of your proposal and an explanation of what makes your business stand out (what is your unique selling proposition) from the other applicants.
• Executive summary: An executive summary is a concise summary of the documents you are presenting, highlighting key information about your business such as the gap your business is filling, the problem you’re solving and/ or the opportunity you are providing within the market; the business objectives, findings, goals, and recommendations.
• Basic company information: Provide basic details about your company, such as your annual budget, and other income and revenue sources. The executive officers and organisational chart of your company should also be included.
• Need statement: Grant reviewers must be aware of your motivation for applying for this funding and that the grant funds are being used to address a pressing need. The information that your grant reviewer needs to decide whether to approve your application should be summed up in your need statement.
• Purpose: Indicate how the money will be used, whether it’s for specialised equipment purchases, employee hiring, or business-related travel expenses.
• Evaluation: Inform the grant reviewer of the data you intend to monitor to ascertain the most effective way to evaluate the funding they provided.
• Budget: Provide an estimate of the project’s completion costs in your funding request. It’s important to keep in mind that grants are frequently given for particular needs and purposes. It’s important to mention any additional income or funding sources you anticipate coming your way.
• Documentation: Financial statements, tax-exempt letters (if you are a not-for-profit organisation), and other relevant documents that may increase your chances of being awarded the grant may be requested by your grant reviewer.

Tips for writing a successful business grant proposal include:

• The funding proposal should clearly outline your objectives or goals.
• Your objectives should be realistic and address a problem your business will solve in the market.
• Make sure your objectives are specific and measurable.
• The proposal should also outline the specific steps the organisation (business) will take to achieve these objectives and define how the funding will be used.

Where to get the funding: A list of non-repayable business grant options

Startups and SMEs can, for example, look at grant programmes that are offered by government agencies like the Department of Small Business Development (DSBD), Department: Trade, Industry and Competition (DTIC), National Youth Development Agency (NYDA), National Empowerment Fund (NEF), the Industrial Development Corporation of South Africa (IDC), and Technology Innovation Agency (TIA).

Here are some of the non-repayable business grant programmes:

Agro-Processing Support Scheme (APSS) – DTIC

The scheme targets businesses in food and beverage value addition and processing (including black winemakers), furniture manufacturing, fibre processing, feed production, and fertiliser production.

Benefits: The scheme offers a 20% to a 30% cost-sharing grant to a maximum of R20 million over a two-year investment period, with a last claim to be submitted within six months after the final approved milestone.

Businesses that can apply: To be eligible for a South African Agro-processing/beneficiation operation, entities must be registered as a business, a taxpayer, and involved in a new operation. The business must be B-BBEE compliant, undertake an investment project aimed at retaining and creating employment, boost local capacity, adhere to sectoral minimum wage and legislative beneficiaries, and source at least 50% of raw materials from South African suppliers.

Apply: Download form

Black Industrialists Scheme (BIS) – DTIC

The grant programme of the Black Industrialists Policy aims to unlock the industrial potential of predominantly black-owned and black-managed businesses within the South African economy.

Benefits: This is a cost sharing grant ranging from 30% to 50% to approved entities to a maximum of R50 million.

Businesses that can apply: To qualify for the Black Industrialists Scheme, an entity must be registered in South Africa, a taxpayer in good standing, involved in new operations, aligned with productive sectors, have over 50% shareholding and management control, have a valid B-BBEE certificate, have expertise in the sector, have a minimum investment of R30m, and undertake a project resulting in direct employment.

Apply: Download form

Business and Arts South Africa Supporting Grant Programme

Incentivises business sponsorship of the arts by providing additional funds to a sponsored arts organisation.

Benefits: The value of the initial sponsorship will play a role in the amount of supporting grant funding allocated to the project.

Businesses that can apply: Organisations whose core business is in the arts, cultural or creative sector are eligible to apply. Those organisations must be delivering arts, cultural or creative projects with confirmed business sponsorship in cash and/or in-kind, and those that are Business and Arts South Africa (BASA) members will be given priority.

Co-operatives Incentive Scheme (CIS) – DSBD

A fully non-refundable business grant intended to increase cooperative enterprises’ competitiveness and viability. By providing an incentive that promotes broad-based black economic empowerment, it lowers the operating costs of cooperatives.

Benefits: The CIS allows a single cooperative entity to receive a maximum grant of R350 000 (three hundred fifty thousand rands), allowing multiple activities if the cumulative grant does not exceed the maximum. The grant can be applied in one or multiple applications.

Businesses that can apply: Co-operatives must be registered under the Co-operatives Act of 2005, owned by historically disadvantaged individuals, have diverse economic sectors, adhere to co-operative principles, and be biased towards women, youth, or disabled individuals.

Apply: Download details

Clothing and Textile Competitiveness Improvement Programme (CIP) – DTIC

Programmes make available non-repayable business grants allocated for the formation of clusters of either similar manufacturing entities or a value chain cluster, comprising e.g. manufacturers, suppliers and retailers.

Benefits: Capital equipment as well as people, product, process and market development improvement for brownfield or greenfield interventions to a maximum of R 20 million per applicant.

Businesses that can apply: Approval of funding will be based on economic growth merit and sustainability of the business. The programme will focus on identifying opportunities for small and medium enterprises and black-owned enterprises.

Apply: Download forms

Infrastructure Investment Programme for South Africa (IIPSA) – DBSA

Provides innovative financing, involving the blending of EU grants together with loans from participating Development Finance Institutions.

Benefits: Except for commercially viable projects, direct grants up to 100% co-finance the capital expenditure of socio-economic infrastructure projects with loans from participating DFIs.

Businesses that can apply: Projects and programs in South Africa and the SADC region with a minimum capital investment value of R500 million, or the equivalent in USD/EUR, will be taken into consideration by the IIPSA.  Initiatives with lower investment values may also be taken into consideration if they can be adequately justified, particularly if combining multiple projects into a program is doable.

Apply: Download forms

Export Marketing and Investment Assistance (EMIA) – DTIC

The scheme develops export markets for South African products and services and recruits new foreign direct investment into the country.

Benefits: The package includes sample transportation, exhibition space rental, stand construction, interpretation fees, internet connection, telephone installation, daily subsistence allowance, economy-class airfare, and exhibition fees up to R50,000. Exporters will be compensated for recruiting new foreign direct investment (FDI) into South Africa, including return airfare, daily subsistence allowance, sample transportation, and marketing materials.

Businesses that can apply: The list includes South African manufacturers, exporters, trading houses, commission agents, export councils, industry associations, and JAGs representing at least five South African entities.

Apply: Online application

Tourism Transformation Fund (TTF) – NEF

Funding earmarked to transform the tourism sector. To qualify, enterprises must provide services to tourists as their direct clients. The enterprise must be at least majority (51%) black-owned. The grant portion of the funding is capped at R5 million per successful applicant.

Benefits: The Department’s grant contribution for approved applications is limited to 50% of the total funding approved and is capped at a maximum of R5 000 000 (Five Million Rand) per beneficiary.

Businesses that can apply: Majority of black-owned tourism entities and transactions that are commercially viable and sustainable, as per the results of the due diligence processes of the NEF.

Apply: All TTF applications and inquiries should be sent to: tourism@nefcorp.co.za

National Youth Development Agency – NYDA

Support for young entrepreneurs in the form of non-repayable business grants and non-financial business development support. The programme aims to enable youth entrepreneurs to establish or grow their businesses.

Benefits: Financial support starts from R1000 and goes up to R100 000. The financial assistance from the grant can be used for working capital, financing the assets and purchasing stock.

Businesses that can apply: The NYDA grant programme focuses on youth entrepreneurs  (18 -35) who are intentional, promising and currently at a new stage of development.

Apply: Download form

Youth Pipeline Development Programme – IDC

A part of the IDC Special Scheme business support and grant funding programme. This grant assists potential applicants to improve the readiness of their proposal.

Benefits: The fund size of this programme is R50 million. Cost per job of up to R800 000 for the duration of funding – calculated using total project cost.

Businesses that can apply: Support is available to all youth-owned businesses that meet the IDC sector and funding limits. It is available to South Africans and permanent residents up to and including the age of 35 years at the time of final approval.

Apply: More information

Support Programme for Industrial Innovation – DTIC

This incentive provides financial assistance for the development of commercially viable products and processes. Similarly, it facilitates the commercialisation of such technologies.

Benefits: A percentage of ‘qualifying’ costs incurred in the development activities of a specified development project. Maximum of R2m for Product Process Development Scheme, R5m for the Matching Scheme and R10m for the Partnership Scheme.

Businesses that can apply: South African private-sector enterprises. Specific provisions apply under the different schemes.

Apply: More information

Seed Fund – TIA

According to the DTIC, the purpose of the fund is to assist small, medium and micro-sized enterprises (SMMEs) and higher education institutions (HEIs) in bridging financing requirements to translate research outputs into fundable ideas for commercialisation.

Benefits: Grant funding of up to R650 000 per application will be allocated together with the specified conditions around monitoring and evaluation.

Businesses that can apply: SMEs focused on developing technological solutions to enable their businesses.

Apply: Download brochure

Sector Specific Assistance Scheme – DTIC

This scheme compensates for costs in respect of the approved activities aimed at the development of South African emerging exporters through events. This incentive provides financial support for physical and digital events participation by qualifying emerging exporters.

Benefits: The Sector Specific Project funding is a reimbursable 80:20 cost-sharing grant to provide financial support to export councils, Joint Action Groups and Industry Associations.

Businesses that can apply: The project must have a developmental and/or promotional focus and enhance sector export, performance, and/or emerging exporter capabilities. Projects should support specific value chains within sectors or the sector as a whole to achieve the SSAS objectives.

Apply: Download form

Seda Technology Programme – (STP)

This programme offers non-repayable small business grants. Additionally, entrepreneurs can access support services, including incubation, quality and standards and technology transfer services.

Benefits: A maximum amount of R600 000 can be requested, and needs to be motivated by demonstrating a return on investment.

Businesses that can apply: The criteria for beneficiaries include that all competitive manufacturing and processing sectors with high product demand and some service-related industries, that have a manufacturing component, can apply.

Apply: Download form