What do they do, and how do I get access to their services?
Are you an entrepreneur looking to start-up a medium-sized manufacturing business? Do you already manufacture and wish you had the capital to expand? Are you from a previously disadvantaged group of people in South Africa and in need of funds to create jobs and increase your operations? Do you require financial support to acquire capital for buildings, equipment, expansion or working capital? Then look no further than the IDC for funding.
The IDC provides funding to businesses in the form of debt, equity & quasi-equity, guarantees, trade finance and venture capital in order to create jobs, develop rural areas, renew urban areas, alleviate poverty and empower the previously disadvantaged as well as marginalised groups such as woman, the disabled and low-income working communities. They work in key sectors such as basic & speciality chemicals, clothing & textiles and basic metal & mining and their role is to enhance the industrial capability of South Africa by supporting businesses that show economic merit, i.e. are profitable and sustainable. This is done with a focus on black skills development.
- You need to have started a new business or should be running an existing registered business
- They require some form of reasonable financial contribution to be made by the shareholders/owners / sponsors
- Your business should adhere to principles of black economic empowerment
- The business needs to have economic merit (be profitable and sustainable)
- The business needs to be compliant with international environmental standards
- Your aim should be to expand the industrial base, not to refinance existing infrastructure
- Your business should be creating jobs
What services do the IDC offer?
- The IDC offers funding for start-ups and existing business in need of between R1 million and 1R billion.
- They offer tailored non-financial support
- They provide short term, medium-term and long term loans in a range of instruments such as equity, debt and trade finance
- They offer funds in several sector-specific schemes
What sector-specific schemes are there?
Gro-E Youth Scheme:
This is a R950 million fund that provides finance to youths involved in renewable energy and energy efficiency projects. It is open to South African residents and permanent residents that are younger than 36 at the time of approval. These young people should also own at least 26% of the business, be involved with the operations of the organisation, meet BBBEE requirements of IDC level 4 and be a start-up or expansion within South Africa. They should require between R1 and R50 million per transaction in equity, quasi-equity and loans.
These funds are aimed at bringing projects out of the informal sector into the mainstream economy that have a high long-term impact on economic growth.
Agro-processing Competitiveness Fund
This fund aims to support businesses that need to increase their competitiveness, growth, job creation & development in the agro-processing and beverage industries.
Product Process Development Scheme
This type of scheme provides financial support to small enterprises (Total assets of less than R5 million and annual turnover of less than R13 million and less than 50 employees) and helps them to develop new products & processes.
Risk Capital Facility Programme
This scheme provides risk finance to previously disadvantaged individuals.
Transformation & Entrepreneurship Scheme
This scheme assists marginal groups of South Africans (Such as women, the disabled) in their expansions and acquisitions. It also provides mentorship and non-financial support.
Green Energy Efficiency Fund
The aim of this scheme is to help South Africa to become a low carbon economy by improving energy efficiency. They focus on bringing down energy-related costs, improving production capacity and operational effectiveness.
How do I apply for funding from the IDC?
Step 1: Check if you comply with the minimum requirements
Step 2: Find a scheme that is geared at meeting your specific needs
Step 3: Go to the IDC website at www.idc.co.za and click on the ‘APPLY FOR FUNDING’ icon in the top right of their homepage
Step 4: Follow the prompts and submit a written request for funding, funding request letter, executive summary and completed business plan according to the specifications mentioned on the site.
If you have any further queries, you can contact them.
In writing at: The IDC
PO Box 784055
Or by email: email@example.com
Or by phoning: 011 269 3000 / 0860 693 888