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Government Funding

National Youth Development Agency (NYDA) Funding

The National Youth Development Agency is offering youth businesses the opportunity to apply for and receive grant funding. This funding will help to grow youth business and increase job creation within South Africa.

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Through the National Youth Development Agency (NYDA) Grant Programme, young entrepreneurs have the opportunity to start and grow sustainable businesses.

In 2013, the NYDA changed its youth enterprise funding model from a fixed interest loan structure to a micro-finances grant provision system. This means that you will not have to pay back the funding the agency provides you with.

Content in this guide

  1. How Does the Fund Work?
  2. Who Qualifies For NYDA Funding?
  3. NYDA Funding Exclusions
  4. What Is The Grant Approval Process And How Long Is The Lead Time?
  5. What Documentation Do I Need To Apply For NYDA Funding?
  6. Contact Details for NYDA Funding

NYDA partnered with Industrial Development Corporation (IDC) and the Small Enterprise Finance Agency to assist youth-owned businesses with funding and support over a period of five years.

This R25 million grant programme offers both financial and non-financial support to qualifying young entrepreneurs between the ages of 18 and 35.

Only around 500 small to medium enterprises can expect to benefit from the financial portion of the NYDA Grant Programme per year.

These businesses will consist of individual ventures and cooperatives. Additionally, many more can benefit from non-financial business support services including branding, marketing and website development.

Here you’ll find information on how to get funding from NYDA. However, do you have what it takes to run your own small to medium size enterprise?

Related: Attention Black Entrepreneurs: Start-Up Funding From Government Grants & Funds

If you’re an individual or a group of young people who want to start or grow an existing business, then NYDA Grant Programme is the right funding for you.


1. How Does the Fund Work?

how-does-the-National-Youth-Development-Agency-workNYDA is an organisation established in 2008 to help address the problems facing South African youth such as skills development and unemployment. The NYDA plays a lead role in ensuring government, private sector and civil society make youth development a priority by identifying and implementing solutions to address youth development challenges.

By empowering the youth and their businesses this entrepreneurship can improve job creation and help to elevate unemployment rates.

The NYDA is moving away from youth enterprise finance in the form of loans and more toward micro-finance grant provisions.

Related: Enterprise Development Programmes For Black Entrepreneurs

The grant provides both financial and non-financial support to youth entrepreneurs. Grants start from R1 000 to a maximum of R100 000 and support includes mentorship programmes, a voucher programme, market linkages, entrepreneurship development programme, youth co-operative development programme, and other business support services required.

The grant programme consists of two categories, specifically financial and non-financial business support services, which the entrepreneur needs to commit to for two years.

For young entrepreneurs seeking grants, grants are available for (and not limited to) motor mechanics and panel beaters, electricians, plumbers, domestic appliance repairs and services, hair dressers, cleaning companies, beauticians, small-scale recycling businesses, car washes and street vendors to name just a few.

The grant structure is in the following three levels, each focusing on a different type of youth enterprise, such as:

  1. Individual grants issues to formal and informal businesses that are in the start-up development phase of their business.
  2. Grants issued to co-operatives, meaning an autonomous association of people united to meet common economic and social goals through a jointly owned and democratically controlled enterprise.
  3. Another avenue is community development and facilitation projects.

For non-financial business support services, entrepreneurs will benefit with programmes including mentorship, market linkages, voucher programmes, entrepreneurship and youth cooperative development programmes.


2. Who Qualifies For NYDA Funding?

young-entrepreneur-qualitiesThe following are the grant programmes qualifying criteria:

  • You need to be at least 18 years old and no older than 35 years old.
  • You’ll need the grant for business start-up or growth.
  • You will need to have the necessary skills, experience or with the potential skills needed for your enterprise.
  • You have to be a South African citizen and a resident within the borders of the country.
  • You have to run the day-to-day operations and be management of the business.
  • The grant that you require can’t be less than R1 000 and more than R100 000.

Here are the following thresholds that your business will need to fit into in order to qualify for the grant:

Threshold 1 Survivalist Business R1 000 – R10 000
Threshold 2 Start-up R10 001 – R50 000
Threshold 3 Growth R50 001 – R100 000
  • Your business will need to operate either informally or formally and should be a micro enterprise, such as street traders, vendors, emerging enterprises.
  • Your business will need to strive towards making a profit and should be commercially viable and sustainable.
  • The members of your business need to be 100% South African youth citizens.
  • Your business operates within the borders of South Africa.
  • Your business will need a bank account or the Agency will assist you to open one.
  • If your business is a cooperative, the group must be a minimum of five people.

Government Funding and Grants for Small Businesses

Your much needed capital investment could come from government funding and grants. Here is a comprehensive guide to government funding available in South Africa.


3. NYDA Funding Exclusions

fund-exclusionGrants are not given to businesses that fall within illegal or ill-reputable activities like gambling, drugs, arms, sex trade. Included in the exclusions of the NYDA grant funding programme are enterprises which requires less than R1000 for funding, partial funding, co-funding or funding towards a deposit loan from another lending organisation.

Another factor to keep in mind is that business are ineligible if they have a contract or bridging finances, or have NYDA staff members or Board Committee Members or Members of the Accounting Authority that are part of management.

If a staff member’s relative were to apply for funding, the staff member would have to recuse themselves from the pre and post approval process.

Related: 3 Start-up Funding Tips To Help Launch Your Company

Additionally if your business falls within the gambling, gaming or sex industries, and/or operates illegal activities it is ineligible including:

  • The sales of tobacco as the primary source of income.
  • The sales of alcohol as the primary source of income.
  • If your business is an investment trust or venture capital/private equity funds.

Your business will be ineligible if you require the funding to:

  • Substitute an existing financier.
  • Have NYDA issue a guarantee in favour of a third party.
  • Become seed capital for research and development.

Your business will also be excluded if your shareholders/ members of your team lack contractual capacity because of:

  • Being of unsound mind.
  • Have a record for fraud or corruption.
  • If you, as the owner, are an un-rehabilitated insolvent.
  • If you, as the owner, are attending school other than tertiary.
  • Pyramid sales schemes.

Equally important, NYDA won’t provide funding for a vehicle of any kind.

Related: Funding And Resources For Young SA Entrepreneurs

You will not be able to use NYDA funds for the following:

  • To pay a bribe.
  • Re-finances any of your existing loans.
  • Any material purpose not declared in the application for grant or defined during the due diligence stage and detailed in the approved Terms & Conditions, unless where NYDA has supplied written approval.
  • To settle overdue or outstanding South African Revenue Service liabilities, whether current on non-current.

However the grant may cover working capital, asset finance and stock purchases.


4. What Is The Grant Approval Process And How Long Is The Lead Time?

Grant-approvedThe Grant Officer will assist you to complete both the business plan and grant application form when you visit a NYDA office branch. Additionally, the Grant Officer will ensure that all your required supporting documentation is in place before the application reaches the Branch Manager.

The Branch Manager will then review your file for compliance before submitting it to the Branch Grant Approval Committee. All documentation that you submit needs to be certified original copies, such as issued bank statements and not internet print-outs.

Related: Funding And Financial Assistance For SA Women Entrepreneurs

The lead time for any application for a young person to receive a response from the Branch Grant Approval Committee, whether favourable or not will be 21 days.

Please find any more frequently asked questions here.


5. What Documentation Do I Need To Apply For NYDA Funding?

funding-and-grant-documentationFind your nearest NYDA branch office below and bring the following documentation with you to complete the application process:

  • Business plan
  • Business bank account or personal bank account latest statement (if you haven’t opened a business bank account)
  • Proof of residence
  • Certified copy of your ID
  • Quotation from suppliers, with signatures and appropriate stamps.

6. Contact Details for NYDA Funding

Contact-Details-for-NYDA-fund

  • For more information on funding available visit www.nyda.gov.za.
  • Call the call centre on 0800 52 52 52.
  • Visit the nearest NYDA branch – visit here for a full list of NYDA branches and contact details.

 

Read next: How to Write a Funding Proposal

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20 Comments

20 Comments

  1. kele

    Feb 10, 2014 at 11:02

    I have been to nyda rustenburg and they said they don’t fund salons.. I really don’t understand this

  2. nwabisa

    Jun 5, 2014 at 13:56

    Hi
    i just want to know, my brother is a car mechanic can he also get the grant for his business….

  3. mandisa

    Jan 20, 2015 at 10:38

    lizzy, i can assist you with chickens. email me back.

  4. tsholofelo

    Mar 12, 2015 at 23:27

    Hey..i am involved in a learnership that is funded by NYDA, we are struggling 2get ourpromised stipends,id like 2 know if u knw anything abt this….its been 3months now nd i according 2 wat i heard…is dat u guys fund a business before it starts operating bt de answer we get wen we question abt our stipends is dat,NYDA has not tranferred any money to them…please help…the company’s name is Hola Bon Renaissance situated in johannesburg marshall town…..

  5. Mahmood

    Apr 8, 2015 at 09:52

    morning am Mahmood from Kzn in Ladysmith I want to start my own company based in Plumbing I got certificate for it and experience ,what I need its money to buy all my tools I might need and register it but if I can be assistant I would be happiest person thanks for time alot

  6. isaacs

    Apr 14, 2015 at 13:46

    i am in the business of printing and outdoor advertising and haveapplied to the nyda for a grant,followed every procedure even signed an agreement form eith them now its been 14 months now, what does one have to do to get help from this agency

  7. Themba Sibitane

    Apr 15, 2015 at 20:53

    My name is Themba Sibitane from Mpumalanga at Ehlanzeni region where by I have completed my NQF LEVEL 4 CERTIFICATE in TVET College did Primary Agriculture and now I have a full information and knowledge about mix farming of which now I wana start a cooperative with other young people or my team members that some are still completing the same programme and others have completed it. So I wana check how can we be assisted in finding founds to start our business in the Integrated Farming that will deal with both Growing Vegetables and small Live stock like Chickens, Pigs, Goat and Sheeps and even produce Beef.

    • Happy

      Jul 17, 2015 at 03:02

      I’m interested,thnk il like to start such a business too ,let’s tok n c wt we cn cum up wit

    • Nomfundo Verah Sibiya

      Mar 24, 2016 at 20:51

      Hi Themba, would like to know how this went? Did you manage to start?

  8. phelisa

    May 4, 2015 at 17:53

    Hi,am a final year student in public management,am good in fashion so I want to start my fashion line can NYDA help me?am so desperate plz people help

  9. Mthokozisi

    Jun 17, 2015 at 11:11

    Guys i have a cab/private taxis business i need funding to get more cars

  10. Happy

    Jul 17, 2015 at 03:03

    Wer do u wna start it ,I’m interested

  11. LaNteku Marquez Latinian

    Sep 30, 2015 at 14:31

    i really need funding to start my business as a supplier of beauty products and other women related products. please help me.

  12. Eva

    Nov 27, 2015 at 11:52

    hi, am Eva…I am a chef professionally and would like to start a catering company, I have five years experience in five star hotels and recently I have been working as an events coordinator …please help me .

  13. Tshepo

    Jan 22, 2016 at 12:59

    Hi. I am Tshepo, I really need help & funds to create a training skills centre

  14. Pfunzo Nicholas Ravele

    May 19, 2016 at 18:43

    HI IM RAVELE PFUNZO FROM LIMPOPO I DID FARM MANAGEMENT AT SCHOOL SO MY FRIEND LEASE ME LAND APPROXIMATELY +/- 10 HECTORS SO I DONT KNOW WHERE TO START, CAUSE I HAVE NO CAPITAL

  15. Mbodi N

    Jul 1, 2016 at 22:10

    Hi am 24 yrs old i want to start a bakery in need funding, please help
    contact me on 5854mbodi089@gmail.com

  16. Ndumiso

    Aug 19, 2016 at 11:22

    I’m Ndumiso I.D number 9511125928082 and I really need help from nyda.I have a small welding business because I have a welding certificate.i just need fund so I can grow up my business and give job opportunities to the youth around my place.Please help me.From estcourt.

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Government Funding

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Your much needed capital investment could come from government funding and grants. Here is a comprehensive guide to government funding available in South Africa.

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Many new small businesses go through the struggle of finding capital to start-up of expand their businesses. Government funding and grants can be a worthwhile way to get the funds that you need.

There are a lot of important things you need to be aware of such as: Strict criteria, a lot of paperwork and maybe even a very long wait. It is worth it in the end so have a look and see which government funding and grants you qualify for.

What are government grants?

This is when a project or initiative is awarded government funding for some or all of its financial support. The business grants do not need to be repaid or accrue interest and have strict guidelines for application. Government funding is linked with efforts such as black economic empowerment, job creation and developing the economy.

Here is a list of some of the government grants available for business funding in South Africa:

Contents:

  1. Automotive Investment Scheme (AIS)
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  4. Critical Infrastructure Programme (CIP)
  5. Film Incentive Programme
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  9. National Youth Development Agency (NYDA)
  10. National Empowerment Fund (NEF)
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70-80% of small businesses don’t survive their first year, says Proudly South African CEO, Eustace Mashimbye, with only 9% surviving 10 years. Incubators were developed to reduce the chances of failure of start-ups by offering sustainable and fundamental entrepreneurial support.

Incubators enable entrepreneurs and innovators to find the necessary support and resources to build and maintain a successful start-up. An incubator can offer you:

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“Getting involved with an incubator requires more than simply filling out an application. You need to get clear about which type of incubator would be the best fit. One of the most damaging mistakes a brand-new company can make is choosing one that doesn’t thoroughly meet its needs,” explains Nav Athwal, founder and CEO of RealtyShares.

Here are 58 South African business incubators for start-ups and what they can offer you:

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The department of trade and industry’s Black Business Supplier Development Programme is a cost-sharing grant, which offers support to black-owned enterprises in South Africa. The DTI contributes 90% of the cost of a project and the applicant 10%.

Objectives

The programme aims to fast-track existing SMMEs that exhibit good potential for growth, grow black-owned enterprises by fostering linkages between black SMMEs and corporate and public sector enterprises, complement current affirmative procurement and outsourcing initiatives of corporate and public sector enterprises, and enhance the capacity of grant recipient enterprises to successfully compete for corporate and public sector tenders and outsourcing opportunities.

Qualifying criteria

3-embedded-image-investment-support-for-black-business

The business must be majority black-owned (50 plus one share) and have a significant representation of black managers on the management team. The maximum annual turnover is R12 million per annum, and the business must have a trading history of least one year. Businesses can qualify for a grant to the maximum amount of R100 000. The requested amount should not exceed 25% of the entity’s previous year’s turnover.

To apply

Applications must include a detailed business plan, financial statements, turnover projections and a tax clearance certificate.

Contact

Go to www.dti.gov.za

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