The Economic Dilemma

Let’s cut to the chase:  The economy is in limbo, unemployment is at all-time high, particularly among the youth. Wealth is spread unevenly. These factors are causing immense strain amongst communities in South Africa. Regardless of the origins of this dilemma, we have to work at solving it and quickly, not merely chipping away at the edges. We have to tackle these issues in a practical and meaningful way. Although SME growth is core to economic development in South Africa, the access to finance for developing a business is one of the major obstacles SME’s face.

Offering comprehensive solutions for preferential procurement and enterprise development

FINANCIAL SOLUTIONS

  • Asset based finance solutions between a black owned company and a financial institution.
  • Black owned company must have a long-term contract with a blue chip company to provide goods / services that is produced by the asset.
  • Standard Bank supports financing of assets based on contracts with relaxed surety requirements.
  • IDC has a R4.5 billion youth fund also with relaxed surety requirements.

EMPOWERMENT SOLUTIONS

  • Preferential Procurement, Supplier Development and Enterprise Development make up 44 points of BBBEE scorecard. Single biggest element in the BBBEE scorecard.
  • Correctly structured, each R1 spent on goods/services from a 51% black owned company, will be recognized as R6 spent on the BBBEE scorecard.
  • Supplier Development and Enterprise Development do not have to have a cashflow impact.
  • Assets can be sold to these empowered companies which will also then qualify for Supplier Development or Enterprise Development.
  • There are not enough black owned companies to collaborate with to increase your BBBEE level.
  • We structure your Supplier Development and Enterprise development contributions such that it will add value to your business activities and processes.
  • Training solutions using “Employment Tax Incentive” and Tax allowances for learnerships. Under certain conditions, you may even claim the full cost and be cashflow positive for the period.

DTI GRANT SOLUTIONS

Black industrialist scheme 

  • Possible grants of between 30 - 50% of the cost price of qualifying assets up to a maximum of R50 million.
  • Black ownership (more than 50% and black management) a requirement.
  • Black director and shareholder must have “skin” in the game.

Strategic Partnership programme

  • Cost sharing grant of 50% on qualifying assets up to a maximum of R15 million based on the number of black suppliers supported.
  • Company must support at least 5 small business of which 60% are at least 51% black owned.
  • Available for machinery, infrastructure and commercial vehicles.
  • Available only for manufacturing, agro-processing, mineral beneficiation or manufacturing related services.

Agro-processing Support Scheme (APSS)

Cost sharing grant of 20% up to 30 % on qualifying assets up to a maximum of R20  million over a 2 year investment period

  • Available for acquisition of  new machinery and equipment, tools, forklifts, green technology, energy, resource equipment, commercial vehicles, buildings, and Competitiveness improvement cost.

Focus is on the following sub-sectors:

  • Food and beverage value addition and processing (including  Black winemakers)
  • Furniture manufacturing
  • Fibre processing
  • Feed production
  • Fertlizer production