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21/05/2014

Getting hold of the investment incentives offered by the DTI.

Speaker: Theo Meintjes

BBSDPBlack Business Supplier Development

Program

• Cost sharing Grant• Black owned businesses (>50%)• Improve competitiveness & sustainability• Help become part of mainstream economy• Open until 31 July 2017

BBSDP

Qualifying Criteria

• 51% black majority shareholding;

• R250 000 to R35 million turnover per year;

• 50% management by black people (HDI)

• Enterprise formally registered for VAT;

• Be operating and trading for at least 1 fin. Yr.

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Qualifying criteria (cont.)

• at the sole discretion of the dti, an enterprise that has been operational/registered for less than a year may be considered for this incentive, provided that the enterprise can supply sufficient evidence to service a tender/contract.

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How it works

• Applicant pays their part + VAT to supplier

• Prove of payment to DTI

• DTI pays their part.

• In exceptional cases, applicant is allowed to

pay in full and claim back grant.

How much?

• Tools, Machinery & Equipment– 50% – maximum R800,000 cumulative (But DTI allows up to R1m).

• Interventions– 80%– Maximum R200,000 cumulative

• NB: Grant My not exceed 30% of previous yr. turnover

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Requirements to apply

Some of the documents required when applying• Signed financial statements• Three quotes• Tax Clearance Certificate of applicant• Tax clearance certificate of preferred supplier• Proof of available funds• ID’s of owners, management and all workers

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Examples of qualifying expenses

ENTERPRISE SUPPORT SERVICES• Company diagnostics;• Business Plan to raise finance• Management information systems;• Quality management systems and assurance• Patenting and intellectual property rights;• Production and productivity improvements;• Product improvements;

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Qualifying expenses (cont.)

ENTERPRISE SUPPORT SERVICES • BEE rating and certification; and• Merger (majority shareholding) and acquisitions

NOTES: 1. Single item applications with new TCC’s and based in Gauteng appear to work best.2. Expenditure that occur over a period of time appear to be giving most problems.

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Non qualifying expenses

• Office equipment, furniture and computer hardware costs, except for– Business Process Services (BPS) applications; Land

and buildings; Working capital;• Training programmes that exceed five (5) weeks or

one-hundred and sixty (160) notional hours;• Long-term formal training (e.g. a Master of Business

Administration), including training at accredited institutions such as universities;

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Non qualifying expenses (cont.)

• Interventions that are already funded by another government scheme or parastatal;

• Any other costs that the Adjudication Committee, in its sole discretion, deems as non-qualifying; and

• Design and printing of marketing material

• Vehicles (sedans, mini buses and buses , panel vans ,bakkies)

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Network facilitators

• Accredited• DTI pays fees

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How is this program performing?

• Over subscribed.• Could be as quick as 6 weeks, but that is the

exception.• Approx. 4 months to process an application• Approx. 4 months to process a claim.• Administration is reasonable

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Conclusion

• A successful program • Can be frustrating in certain cases

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