DTI Funding is the gateway to cost-sharing incentives, grants, and support that push South African businesses from plan to production. By aligning projects with national priorities—localisation, exports, jobs, and competitiveness—DTI Funding helps founders unlock the capital they need to scale responsibly.
Business Funding
If you’re expanding capacity, modernising equipment, or commercialising IP, DTI Funding can strengthen your stack alongside banks, DFIs, and private investors. This guide shows how DTI Funding is structured, who qualifies, typical cost-sharing mechanics, and how to combine it with other finance for a complete runway.
Overview
The Department of Trade, Industry and Competition’s incentive suite—widely known as DTI Funding—is one of South Africa’s most effective tools for driving economic development and industrialisation. It supports businesses that expand production, create jobs, and boost exports while strengthening local value chains and promoting transformation. Unlike commercial loans that must be repaid with interest, DTI Funding offers grants and cost-sharing incentives—money that rewards delivery and measurable progress, not just potential.
Key benefits and structure of DTI Funding:
- Industrial capacity growth: Helps companies expand facilities, upgrade machinery, and modernise operations.
- Job creation incentives: Rewards businesses that increase employment and invest in skills development.
- Localisation and transformation: Encourages South African sourcing, black ownership, and supplier inclusion.
- Export competitiveness: Provides financial assistance for entering new markets and adapting products for export.
- Performance-based model: Funds are disbursed after milestones—like machinery installation or job verification—are achieved and proven.
For entrepreneurs and manufacturers, this approach offers an enormous advantage. It reduces upfront capital pressure, improves project bankability, and aligns government goals with business outcomes. The secret to unlocking DTI Funding lies in preparation: build a credible business case, show clear impact metrics, and maintain flawless compliance with tax, labour, and B-BBEE regulations.
To maximise your success with DTI Funding:
- Present detailed financial projections and vendor quotations for all capex items.
- Demonstrate the number of jobs to be created, along with realistic timelines.
- Keep documentation—proof of payment, invoices, contracts—neat and audit-ready.
- Partner with reputable co-funders like IDC or commercial banks for bridging support.
- Ensure all compliance certificates are valid and up to date before applying.
In essence, DTI Funding rewards performance and accountability. If your project can prove tangible impact through jobs, localisation, and growth, this funding can become the most strategic boost your business ever receives.
Features
- Incentive-based, not debt: Reimbursive grants or cost-share on approved qualifying costs.
- Milestone & evidence driven: Disbursements follow proof—paid invoices, commissioning certificates, jobs created.
- Sector breadth: Manufacturing, agro-processing, film/creative, green/energy efficiency, and more.
- Stackable with finance: Combine DTI Funding with IDC/DFIs, banks, OEM/vendor finance.
- Compliance backbone: B-BBEE, tax, labour, environmental, and procurement rules apply.
Pricing & Repayment (Read Carefully)
With DTI Funding, “pricing” = grant/cost-share mechanics, not interest. You plan for co-funding (your contribution), reimbursement timing, and cash-flow bridging during implementation.
How it generally works (plain language):
- Cost-sharing ratio: DTI covers a % of qualifying spend; you fund the balance.
- Caps & categories: Each incentive caps total support and defines eligible cost buckets.
- Claims & audits: You spend first, then claim with evidence (invoices, proof of payment, completion).
- No interest or principal: It’s not a loan; your “repayment” is delivery on milestones and compliance.
- Bridging need: Budget working capital to carry costs until reimbursements land.
What improves your funding shape:
- Bankable capex plan with vendor quotes and commissioning timelines.
- Documented job-creation and localisation outcomes.
- Clean governance, B-BBEE, tax and labour compliance.
- Co-funders (IDC/bank) to bridge spend and control timing risk.
DTI Funding – Pricing/Claims Table
| Item | Typical Shape (Illustrative) | What It Means For You |
|---|---|---|
| Support Type | Grant / Cost-share on qualifying costs | No interest; you co-fund balance |
| Support Ratio | ±20%–50% of eligible spend (varies by scheme) | Bigger impact for job-rich/localisation capex |
| Caps | Scheme-specific ceilings per project/company | Plan phases if your capex exceeds caps |
| Eligible Costs | Machinery, tooling, buildings, training, export dev | Read the fine print; exclude non-qualifying spend |
| Disbursement | Reimbursive, milestone-linked | You need bridging cash and tight paperwork |
| Evidence | Invoices, PoP, commissioning, payroll/job proof | Build a claims folder from day one |
| Compliance | B-BBEE, tax, labour, environmental | Keep certificates current; avoid claim rejections |
User Base
- Manufacturers adding lines, automation, or localisation capability.
- Agri-processors upgrading plant and cold chain.
- Exporters entering new markets or scaling capacity for export orders.
- Creative/film productions with SA spend and jobs.
- Green/efficiency retrofits to cut energy intensity and improve resilience.
Advantages
A strong DTI Funding award de-risks your project, stretches every rand, and signals credibility to lenders and suppliers.
- Non-dilutive leverage: Keep equity while reducing effective capex.
- Better bankability: Incentive approval can unlock IDC/bank participation.
- Discipline by design: Milestones and audits keep execution tight.
- Competitiveness: Encourages tech upgrades, localisation, and exports.
Disadvantages
- Admin heavy: Evidence, audits, procurement rules, and detailed claims.
- Timing risk: You spend first; reimbursements follow—manage cash.
- Eligibility nuance: Not all costs count; scheme rules are strict.
- Capacity needed: Someone must run claims like a project manager.
Safety (Compliance & Governance)
Treat DTI Funding like a regulated project:
- Governance: Clear share register, audited accounts, tax compliance.
- Procurement: Competitive quotes where required; avoid related-party pitfalls.
- Labour & ESG: Contracts, payroll records, HSE compliance for plant upgrades.
- Record-keeping: Claims file with invoices, PoP, serial numbers, photos, and commissioning.
DTI Funding vs Alternatives
Use incentives to lower your effective project cost, then fill the rest with finance that fits your cash-flow shape.
Comparison Table – DTI Funding vs Alternatives
| Option | Best For | DTI Edge vs Them | Where They Win |
|---|---|---|---|
| DTI Funding | Capex with jobs/localisation/export outcomes | Non-dilutive cost-share; improves ROI | Admin heavy; reimbursive timing |
| IDC (DFI) | Capex & industrial scale | Long tenors; sector expertise | It’s debt/equity—pricing applies |
| Commercial Banks | Working capital; simple assets | Speed for collateral-backed items | Limited appetite for complex capex risk |
| Asset Finance | Serialised machinery | Straightforward, quick | Doesn’t fund full project scope |
| Private Equity | Scale + governance uplift | Strategic support | Dilution; higher return expectations |
| Vendor/OEM Finance | Equipment acquisitions | Lower upfront cash | Narrow scope; tied to single vendor |
Alternatives (Smart Stacking)
A practical stack might look like: DTI Funding for cost-share on eligible capex → IDC for plant finance → Bank for working capital → Asset finance for specific machines → Vendor terms to smooth cash. Document outcomes (jobs, local content, exports) to support both claims and covenant discussions.
Application Journey (Step-by-Step)
- Fit check: Choose the right incentive; read eligibility and cost rules.
- Scope & budget: Break capex into eligible vs non-eligible line items.
- Evidence plan: Decide how you’ll prove every rand (invoice + PoP + commissioning).
- Submission: Complete forms, attach compliance docs, and timing plan.
- Approval & contracting: Note conditions; align procurement to rules.
- Implementation: Execute; keep a live claims file with serials and photos.
- Claiming: Submit packs per milestone; respond fast to queries.
- Close-out: Final verification; archive for audits and future applications.
Common Mistakes (and Fixes)
- Throwing in non-eligible costs → Split bills; track eligible categories precisely.
- Weak audit trail → Keep invoice + proof-of-payment + delivery/commissioning together.
- Late compliance docs → Calendar all renewals (tax, B-BBEE, UIF, COID).
- Cash-flow crunch → Arrange bridging (IDC/bank) before starting capex.
FAQ (12 detailed Q&As, numbered)
01. What is DTI Funding in practice?
It’s a set of incentives and grants that reimburse a portion of qualifying project costs if you deliver agreed outcomes—no interest, but strict evidence and compliance.
02. Who qualifies for DTI Funding?
Businesses that expand South Africa’s productive capacity, create jobs, localise inputs, or grow exports—while meeting governance, tax, labour, and B-BBEE requirements.
03. What costs are usually eligible?
Common buckets include machinery and equipment, certain buildings/upgrades, tooling, worker training, and export development—subject to scheme rules.
04. How much funding can I get?
Support is typically a percentage of qualifying spend with a cap per project/company. Plan phases if your capex exceeds a scheme’s ceiling.
05. Do I get cash upfront?
Usually not. DTI Funding is reimbursive: you spend first, then claim with full evidence. Arrange bridging to manage cash-flow timing.
06. Can I combine DTI Funding with loans or equity?
Yes. Many winners stack incentives with IDC for capex, banks for working capital, and asset finance for specific machines.
07. How long do claims take to pay?
Timelines vary; assume weeks to a few months post-submission if evidence is complete. Build float into your plan.
08. What proof do I need for job creation?
Employment contracts, payroll, UIF/COID records, and time-stamped headcount reports that match the project timeline and commitments.
09. What disqualifies a claim?
Missing or mismatched documentation, non-eligible costs, late compliance certificates, or procurement that violates scheme rules.
10. Can startups apply?
Yes—if they meet compliance and can pre-fund eligible costs before claiming. Early-stage firms often pair incentives with IDC/bank bridging.
11. Are export activities supported?
Many schemes support market development and export readiness—think trade shows, certifications, or packaging adaptations for foreign markets.
12. What happens after close-out?
Keep records for audits and future applications. Use your delivery track record to strengthen the next round and to negotiate better terms with co-funders.
Final Verdict
When used correctly, DTI Funding reduces effective project costs, lifts ROI, and attracts co-funders—without diluting ownership. Build a tight evidence trail, manage cash-flow timing with bridging facilities, and align outcomes to jobs, localisation, and exports. Done right, DTI Funding becomes the catalyst that turns your capex plan into a competitive, job-rich reality—and that’s why DTI Funding should be on your shortlist.
