SA’s new Tourism Equity Fund: Here’s how to apply for your share of R1.2 billion
- South Africa’s Tourism Equity Fund provides R1.2 billion to finance acquisitions, developments and expansion projects.
- Applying enterprises need to be majority black-owned, 100% owned by South African citizens and in good standing with SARS.
- Applicants can receive a maximum grant amount of R20 million, depending on the ownership and employment profile.
- But the Small Enterprise Finance Agency warns applicants that “turnaround times may be extensive”.
- For more stories, go to www.BusinessInsider.co.za.
The tourism department has announced the creation of an equity fund which aims to support small-scale stakeholders in the industry, as the sector continues to reel as a result of the global Covid-19 pandemic.
The Tourism Equity Fund (TEF) will provide financial assistance to majority black-owned enterprises. Launched on Tuesday 26 January, the R1.2 billion fund, financed by government departments and South Africa’s major banks, is now accessible to disadvantaged tourism operators.
Between international travel bans, curfews and capacity limitations, South Africa’s tourism industry lost almost R70 billion during the months of hard lockdown. Continued restrictions have sapped much of the industry’s 8.6% contribution to South Africa’s total GDP. The Tourism Business Council of South Africa predicts that more than 600,000 direct jobs could be impacted due to lockdown regulations.
During the virtual launch, President Cyril Ramaphosa recapped the tourism industry’s severe challenges and stressed the importance of the sector’s transformation to empower black-owned enterprises.
The department of tourism has capitalised the fund with a contribution of R540 million. The Small Enterprise Finance Agency (SEFA), which acts as the TEF administrator, has added a further R120 million and the remainder is supplemented by South Africa’s major banks to the value of R594 million.
The fund aims to support accommodation, hospitality-related services, and tour operators in the tourism industry. Loan facilities, capped at ten years, and grant funding will both be offered by SEFA.
The maximum grant amount payable to successful applicants is R20 million and the minimum, R10 million. Applicants whose funding request do not meet the minimum threshold are advised to apply through the department of tourism’s National Empowerment Fund (NEF).
Who can apply for assistance from TEF:
The fund will provide financial assistance for acquiring controlling equity in entities in the tourism sector, funding assets or work capital, and new developments. Each application will be judged according to a scoring criteria which takes into account the level of black management control, women ownership, youth ownership, jobs facilitated and location of the operation.
Applicants who operate, or who are looking to start hotels, lodges, resorts, self-catering units, backpacker facilities, conference and convention venues, or as tour guides, may apply for TEF assistance if they meet the following criteria:
- Registered as a legal entity in South Africa in terms of the Companies Act, 1973
- 100% owned by South African citizens
- Predominantly black owner-managed and controlled (51%)
- Registered and compliant with the South African Revenue Service (SARS)
How to apply for assistance from the Tourism Equity Fund:
Applications opened on 26 January and forms can be accessed via SEFA’s website. Once completed, these applications forms, with supporting documents, need to be submitted directly to SEFA via email@example.com. Any queries can also be directed to this email address. Documentation required, which will accompany the application forms, include:
- Business profile (an overview of the business or business plan)
- BBBEE certificate or affidavit (in line with the Amended Tourism Sector Codes)
- Company statutory statements (financial statements which are reviewed by a statutory auditor)
- FICA documents (copy of ID document, proof of residential address, copy SARS document confirming income tax number and bank document confirming banking details)
- Bank statements (for the past 12 months)
- Certified ID copies of all directors/members
- Latest annual financial statements and management accounts (statement of financial performance and statement of financial position, not older than three months from the date of application)
- Five-year cash flow predictions
- Relevant industry certification
- Facility statements of other funders (where applicable)
The TEF application form is 13 pages long and contains the following primary sections which need to be completed:
- Company details (including contact person, member/shareholder details and background information)
- Financial details (including the total finance required and annual financial statements, not applicable to start-up businesses)
- References (including contact persons/establishments, banks, and accounting officers)
- Personal information (including previous work history, monthly income, assets and liabilities and debt records)
- Surety (which needs to be completed by the sureties of the borrowing entity)
- Checklist for new applications (for asset finance, bridging and term loans)
Applicants who have submitted a complete application form and all required supporting documents will receive an acknowledgement of receipt from SEFA. Outcomes of the application will be communicated “as soon as possible” but SEFA warns that “turnaround times may be extensive taking into account the complexities of the transactions”.
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