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Government Grants for South African Small Businesses

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If you’re thinking about turning your business idea into a reality then there are a number of different methods of funding South African startups commonly use. Very few entrepreneurs have sufficient savings to start a business and most will require some level of capital investment, with equipment, vehicles and staff often necessary to get start-ups off the ground.

Thankfully, there are a number of business funding options available. Some entrepreneurs choose to borrow money from family and friends, use personal savings or even access an instant cash loan from companies like Wonga to give their finances a boost. Others may choose alternative options like crowdfunding, peer-to-peer loans or venture capital to take get their businesses started.

One source of finance almost every business should consider is a government grant. The beauty of a government grant is that it does not have to be repaid, making it an excellent way to finance specific purchases. Here’s our guide to what South African entrepreneurs need to know…

What is a government grant?

A government grant is a form of financial assistance from the government. Grants have strict guidelines for how the funds can be used, with links back to economic empowerment, job creation and developing communities. The beauty of government grants is that they do not accrue interest or need to be repaid, making them a great way to pay for a specific purchase or goal that the business wishes to achieve.

It’s important to note that almost every grant has its own specific requirements and only businesses that can tick all the relevant boxes can access the fund. That means there’s usually a lot of paperwork involved and it can take time for the grant to be agreed.

The role of the Department of Trade and Industry

The Department of Trade and Industry (DTI) works in conjunction with a number of other government departments and institutions to implement schemes and introduce policies that encourage the economic development of South Africa. That includes giving businesses the necessary financial and non-financial support to make their ventures successful.

To this means, the DTI provides grants and financial backing to support economic activities such as manufacturing, export development, market access and business government. That includes a wide range of programmes that may apply to your business.

What current grants are available?

You can find out more about the government grants available from the Department of Trade and Industry here. However, the following is a small example of some of the programmes it currently runs.

  • Black Business Supplier Development Programme – Available to black-owned small businesses to help them improve their competitiveness and sustainability.
  • Automotive Investment Scheme – Business grant aimed at businesses in the automotive sector to increase production volumes and sustain and increase employment.
  • Incubation Support Group – A scheme aimed at creating and developing successful enterprises to revitalise communities and local economies.
  • Aqua-culture Development and Enhancement Programme – This programme is available to organisations involved in primary and secondary aquaculture projects for marine and fresh water.

Have you had any experience with government grants? Was it an effective form of funding for your South African business? Please share your thoughts with our readers below.