The Department of Trade and Industry, the dti, BBSDP, Black business supplier development programme, government incentives, BEE status, business financial management
BBSDP - Black Business Supplier Development Programme
THE BBSDP DOES NOT ASSIST START-UPS.
It is true! The Department of Trade and Industry has a grant of up to R1 000 000 for Black, Indian and Coloured owned businesses to purchase Tools, Plant and Machinery.
The aim of the fund is to grow existing businesses and to employ more people.
The bad news is: “BBSDP is not for start up businesses'.
The DTI's BBSDP program provides black owned small business with a non-repayable grant of up to R1million to assist them in improving their competitiveness and sustainability. It provides a grant (Gift) to a maximum of R800 000 for tools, machinery and equipment. This is to be used as a (50%) deposit, which can be used to secure the additional finance. You will be required to provide the DTI with proof that you can get bank financing.
R200 000 is to be used for business development and training interventions to improve the business corporate governance, management, marketing, productivity and use of modern technology. This portion of the grant is on a 80 / 20% cost sharing.
The business must meet the 6 point qualifying criteria.
If you do not have these 6 points you will not qualify.
Should you be in business for more than one year and need to purchase tools, plant or machinery, The DTI will pay 50% of the price of these goods. You will however need to pay the full VAT amount with your 50%.
You will need to have cash or arrange finance for your 50% contribution before making the application.
Or should you require Business Development interventions like software, training, websites, signage or ISO 9001 Quality management systems, these are available at a cost of 20% +full vat and the DTI will pay the 80% to your chosen supplier.
The DTI does not fund your business or give you cash or loan money.
Our job is to guide you through the paperwork, assess your application and see the process to the end. The DTI pay GraphIT for this service, thus our service is free to you.
The fund allows a business to purchase to the value of 30% of annual turnover. The annual turnover in the financials must correspond with the SARS IRT14 document. To qualify for the full R1m your business needs to turnover more than R6m per annum
30% x Annual turnover = R (amount available to use for BDS and Capex)
The maximum amount of purchases is R2 000 000 with a maximum amount of R1 000 000 paid to suppliers by the DTI.
The fund excludes:
Buildings and wet-work
Motor vehicle and trucks
Cash or loans
Always think in terms of Plant, Tools and Machinery when thinking how you can utilise the fund.
Example: A guest house might need bedding, furniture, out-door furniture, fridges, website and signage.
Excluded would be the carpets, tiling, carports etc.
Example: A restaurant might apply for stainless steel tables, fridges, stoves and ovens, tables and chairs.
Excluded would be the small items like plates, salt cellars, serviette holders, Table numbers, table clothes etc.
Example: A engineering works might apply for a lathe, milling machine, saw. CAD software, Sign on the building, ISO 9001 QMS and a website.Excluded would be delivery trucks, computers (Unless to drive a machine or the Auto Cad system
Our contact information
Alan : Mobile 072 225 6835 or email: firstname.lastname@example.org
Justin: Mobile 072 727 7824 or email: email@example.com
All the above documents can be emailed as PDF documents except the application which needs to be in Word.
The DTI is building up a supplier base and to be loaded onto the system they require the following information on a quote. (It will not load if we don’t have all the requested info.)
Business registered name and registration number
VAT number if applicable
Business Tax number begins with a 9…….
Contact person’s name
The quote must be dated and numbered.
The quote must be valid for 90 days
The quote must have:-
The supplier must produce a Valid Tax Clearance Certificate and show proof of payment of your 50% + the Full 14% Vat in order to get paid. (Not with the application. Inform them that they must have it in order to get paid)
The 3 quotes must be signed by the supplier with every quote they provide. (It doesn’t get put in a register but stays in your file)
Quotations must be comparable. I suggest that you type up what you require in an excel format with your exact requirements and send it to your proposed suppliers. This will speed up the application as the quotes should be comparable.
The three quote system applies. (One quote will get sent back unless it can be proven that they are the only supplier in the land.) It’s your money being spent, thus you choose what you want and from whom provided they have a tax clearance certificate.)
The grant only covers new equipment
The Official DTI Document
The BBSDP outcomes are to improve the sustainability of black-owned enterprises and thereby increase employment.
BBSDP grants are available to any South African business which complies with a stipulated set of requirements, the most significant being that the business must be owned (at least 50.1%) and managed by previously disadvantaged South Africans, that it must have been in business for a minimum of one year, and that it must generate an annual turnover greater than R250 000 per annum.
This is a cost sharing grant for Black owned business, whereby the DTI provides a grant of up to R1 000 000 to assist the qualifying business to purchase machinery and equipment (no pay back of the DTI's portion). The grant is to be used as a 50% deposit and the balance financed by commercial banks, the IDC or the Empowerment fund or similar financial institutions. R800 000 can be used as a deposit and the remaining R200 000 will be a 80/20% cost sharing grant for training, software and ISO9001 etc.
The aim of the grant is to improve or grow the business.
Black Business Supplier Development Programme (BBSDP)
The Black Business Supplier Development Programme (BBSDP) is a cost-sharing grant offered to black-owned small enterprises, to assist them in improving their competitiveness and sustainability, in order for them to become integrated into the mainstream economy and create employment. The BBSDP offers a grant to a maximum of R1 million (R800 000 is ring-fenced for tools, machinery and equipment) per eligible enterprise, to improve principles of corporate governance, management, marketing, productivity and use of modern technology.
Objectives of the incentive scheme
Alan can be contacted on 072 225 6835 or emailed: firstname.lastname@example.org
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