The Small Enterprise Development and Finance Agency (SEDFA), previously SEFA, is an agency of the Department of Small Business Development in South Africa responsible for the Implementation of the small business plan of the national government. SEDFA was established by the adoption of the National Small Enterprise Amendment Act (NSEA) of 2024 that merged merge the Small Enterprise Development Agency (SEDA), the Small Enterprise Finance Agency (SEFA), and the Cooperative Banks Development Agency (CBDA) into one entity.
Objectives of the SEDA Assist funding for SMEs
Second call for the Asset Assist Programme for SMEs
This is the second call for the Asset Assist Programme and if you have participated in the first call, you may want to take note of the key changes:
- When applying to the programme for the purchase of equipment and including raw materials or inventory, the limit for the raw material has been increased from 15% to 30% of the value of the equipment; and
- The proportion of South African employed in the company has been increased from 70% to 90%.
All other requirements that relate to governance, funding limits and sector exclusions have not changed, as discussed below.
The closing date is 29 January 2025 and judging from the popularity of this funding from previous round, it will be competitive and is not likely going to be extended.
Objectives of the SEDFA Asset Assist Programme for SMEs
Small businesses are encouraged to apply for the SEDFA Asset Assist Programme for SMEs to get funding for selected equipment and working capital. The program aims to provide assistance to Small, Medium, and Micro Enterprises (SMMEs) by providing them with funding to purchase equipment for starting operations or for increasing production. The Asset Assist Programme is specifically targeting machinery, equipment, and procurement of raw materials. The raw material or inventory purchase will be limited to 30% of the equipment’s value. The maximum funding for qualifying and selected businesses will be R250,000 and a SEDFA branch will do site inspections and verify existence of these businesses.
The SEDA Asset Assist Programme for SMEs is also looking to increase employment in the country. One of the key questions entrepreneurs must answer at application phase is an indication of the number of jobs that will be created post-investment.
Eligibility
To qualify for the programme, the business must be:
- South African-owned and must provide a valid SA ID document; Sole proprietors will also qualify;
- A registered private company with CIPC documentation;
- Tax compliant and can submit a tax clearance certificate;
- Able to provide Proof of Bank Account;
- Submit three months bank statements, if it is an existing business;
- Employing at least 90% South African citizens; and
- Able to provide a valid address where the business operates.
In addition, the company must:
- Proven track record of supplying and/or references;
- Produce a funding proposal or Business Plan that includes 3-year cash flow projections;
- Have relevant Industry Certification, where applicable; and
- Provide proof of viability and access to market, for example contracts, letters of intent etc.
Exclusions
The following are specifically excluded from the programme:
- Cooperatives as they have a different programme;
- Businesses with turnover of more than R3 million;
- Payment for costs that were incurred before the start of the programme;
- Businesses with a turnover of more than R3 million per annum;
- Bonus payments and costs associated with tendering and tendering documentation;
- Any illicit business activities as well as the purchasing of liquor and cigarettes as stock;
- Business activities related to gambling;
- Non-business-related infrastructure and activities;
- Vehicles for personal use;
- SEDFA will not reimburse sunk costs, so any work that has started prior to funding will be out of scope; and
- State employees as the Public Service Act prohibits State officials from engaging in remunerative work without prior approval from the Accounting Officers of State organs (the employer).
To apply, use this link from SEDA and note the closing date of 29 January 2025.
Other Conditions
Once funding is approved, the small business must be ready to enter into a legal agreement with SEDFA and this must take place within 30 days of receipt of the offer letter. Failure to conclude the legal agreement within thirty (30) calendar days will result in the cancellation or termination of the offer.
Further Information
One of our objectives is to empower small businesses and startups by curating funding opportunities that we come across. Refer to this page for other opportunities.
While formal company registration is not always a prerequisite for accessing funding, it is crucial for formalised entities to maintain compliance. Lack of proper governance will completely hinder any prospects of funding. For guides and articles on governance, please refer to this section of our site.
