CDI Capital Growth Fund’s aim of creating 600 new jobs by 2023
August 10, 2021
Help is on the way for growing small businesses, thanks to CDI Capital Growth Fund’s aim of creating 600 new jobs by 2023
Despite the impact of the Coronavirus pandemic and other shocks to our economy, there are green shoots of growth in some sectors – this includes, for example, small businesses who have focussed on ecommerce and digital services. Capitalising on and funding this growth potential will be key to rebuilding the local economy.
With this in mind, the CDI Capital Growth Fund has opened for grant funding applications. Small businesses that are experiencing growth or are poised for expansion in any sector and can create jobs are encouraged to apply.
CDI Capital is a niche emerging impact funder, and subsidiary of the Craft + Design Institute (CDI) non-profit, which has a 20-year track record of success in supporting small businesses in South Africa. As an impact funder, CDI Capital is committed to creating positive social and economic impact in the SMME sector and the South African economy.
From 2012 -2015, CDI Capital Growth Fund created 464 jobs in 45 businesses with participating businesses growing their combined annual revenue by 73% – exceeding the fund’s initial targets. The current round of funding, supported by the National Treasury’s Jobs Fund, aims to support up to 60 businesses to create 600 new jobs by 31 March 2023.
The fund is poised to repeat the success it achieved in its first round of funding and has already created 447 new permanent jobs in 23 businesses in its second round of funding. CDI Capital aims to identify another 20 businesses nationally within the next three months who qualify to receive this valuable support.
The CDI Capital Growth Fund provides grant funding to unlock barriers to growth for SMMEs and this growth leads to the creation of new permanent jobs. To further support these SMMEs, CDI Capital also provides mentorship and access to working capital loans of up to R500,000 to help fund purchase orders and working capital needs linked to their growth.
This integrated and bespoke approach to supporting SMMEs in its portfolio has shown great results over the last 8 months. Over the period of July to December 2020, during the COVID-19 First Wave, CDI Capital distributed R7million in grants and soft loans plus R1million in technical business and market support grants to 23 SMMEs in its portfolio. The funds were aimed at protecting the businesses and their staff from the impact of the lockdown and devastating loss of revenue, while also supporting the business owners to build and implement recovery strategies. As a direct result of this intervention, all 23 businesses survived, over 900 jobs were protected, and 73% of the businesses measured to date had a net profit before tax of 10% or more.
An excellent recent case study for the impact of the fund is Barrydale Hand Weavers, purveyors of quality handwoven textiles based in the Klein Karoo. The business received CDI Capital Growth Funds in 2020, and used these extra resources to expand its supply into South African retailers, including growing its online retail. This support in the midst of the First Wave meant the business was able to tap into an opportunity created by delays in international production and imports.
Arron Bastable of Barrydale Hand Weavers explains that the “funding has allowed our business to not just survive but grow through the pandemic. Our turnover has increased 35% since 2019, despite the harsh lockdowns. This enabled us to increase wages in October 2020 and create five new jobs in 2020… We anticipate further growth in revenue and expect to create 3-5 additional jobs this year. We cannot thank the CDI and its partners and supporters enough, it has been so positive for our business, thank you!”
Another grant success story is that of NCC Environmental Services – the team recently responsible for helping to halt the spread of the devastating fires in Cape Town. “We are extremely grateful for the partnership with CDI. We were able to offer more than 100 individuals permanent employment contracts, and we could purchase the required personal protective clothing, vehicles and equipment that goes with supplying wildland fire fighting services and urban baboon management,” says NCC’s Linden Rhoda.
Accessing the grant funding, working capital and business support offered by CDI Capital Growth Fund, helps businesses unlock their growth potential and create permanent jobs, as well as contribute towards the economic development and competitiveness of South Africa. “We believe that small businesses are vital to growing our economy and creating jobs – even more so post the pandemic and recent social unrest. With meaningful, socially responsible investment we can maximise the potential of local entrepreneurs, building a generation of South African innovators, and a strong, inclusive economy,” says Erica Elk of the CDI.
Businesses can use the grant funding to unlock growth opportunities and cover needs such as advertising, marketing, communications, building and other fixed structures, equipment, machinery, materials, research and testing, professional services, and so on. Businesses can apply for an amount between R105 000 and R1 050 000, depending on how many jobs they commit to creating before 31 March 2023.
To be eligible to apply a business must:
- Be a South African-owned business, with the controlling interest of the enterprise (51% of the issued ordinary share capital) being held by South African citizens with a valid South African ID OR a South African Registered legal entity itself controlled by South African citizens with a valid South African ID.
- Operate within South Africa, including but not limited to projects, programmes, or enterprises of the business.
- Be an existing business, at least 1 year old (preference will be given to businesses that have been trading for 2 years or more) with turnover or assets above R600 000 (if this was pre-COVID-19 a business will still be eligible).
- Match 20% of the contribution of the Fund through their own cash contribution.
- Must create one job for every R21,000 grant investment, with a minimum of 5 jobs.
- Be tax compliant and supply a valid Tax Compliance Status (TCS).