How to apply for Business Grants
Grants for small business funding tend to be less intensive, and funding institutions tend to be more willing to help you complete your application. Grants for manufacturing businesses that would require a large amount of money will have strict rules attached to them including meeting the production and sales targets you set out in your business plan. Grants for export also require a lot of information about your company and how it intends to use the money it is awarded in growing South African export market.
Applying for a grant requires plenty of preparation and research. To begin the grant-seeking process, you need to understand the different types of grants, what grant money can be used for, and what funding institutions expect from you before they award the grant.
There are no magic formulas, short cuts, or sure-fire methods to follow when you’re hoping to get a grant. You won’t even be able to track down a standardised process for the grant application.
To find out what grant suits your business, start HERE
Know the various types of grants.
A grant is the giving of funds for a specific purpose; a monetary aid awarded after meeting a specific set of qualifications, which aid does not have to be repaid in some instances and a payment on a regular basis for a fixed period in other instances. See here for a list of grants available for businesses in South Africa
Be on the lookout for grants
A good way to discover what grants are available (along with processes for application) is to explore online. Type in search phrases, such as business grants or DTI grants.
Here are some Websites that yield valuable information about various grants and uses of grant monies:
The DTI: The Department of Trade and Industry – Financial Incentives website
Seda: Small Enterprise Development Agency Website
IDC: Industrial Development Corporation
NEF: National Empowerment Fund
Match your goals to the Grant disbursing Institution
Grant Disbursing Institutions bequeath money based on what matters to them, not what matters to you. If the way you plan to spend the grant money doesn’t match the Grant Disbursing Institutions mission, you’re just wasting time.
Thoroughly research each grant (and the organisation that sponsors it) before you apply. Grant Disbursing Institutions are not impressed by people who know nothing about their grant or its mission.
Make your grant application detailed, thorough, and timely — and expect follow-up
Grant Disbursing Institutions recognise the intent of proposals that are thrown together just to get some money out of them. Don’t expect something for nothing. Your grant proposal has to demonstrate that you have a solid plan for using the money. Your documentation needs to be thorough and checked by a recognised institution who has the credibility and knowledge to verify the quality of the information presented. Most grants will require the following information:
- A detailed business plan. this can be anywhere from 5 pages to 500 pages, depending on what you are applying for
- Financial statements – most of these financials will need to be audited and certified to be authentic
- Tax Status – it is very important that your taxes are up to date and you can attain a copy of your tax clearance certificate from SARS as well as a copy of your previous tax return.
- Proof of ownership of the company including shareholders
- ID Copies of directors and key personnel
- Proof of address as per FICA regulations
- Quotations from service providers from whom you intend purchasing goods and services from when applying for the grant. Most Grant Disbursing Institutions require 3 quotations
Don’t take offence when Grant Disbursing Institutions requests additional information about your application and plans — because they will.
Be prepared for the reporting that comes after you’ve secured a grant
No one is going to give you a huge disbursement and then walk off into the sunset. Your Grant Disbursing Institution will want quarterly reports detailing how you are using the money.
Being awarded a grant is not like winning a game show: You must spend the money according to plan. Use the money exactly as you outlined in your grant application. If you don’t, at best, your Grant Disbursing Institution will want the money back (at worst, you’ll be charged with fraud).
Many, but not all, grants are non-taxable. Ask the Grant Disbursing Institution about the tax status of their grant so you won’t be surprised by being bumped into a higher income bracket.