Support programme for Industrial Innovation
Bringing ideas to lifeThe Product Process Development (PPD) Scheme provides financial assistance for small, very small and micro enterprises whose total assets (excluding fixed property) are below R5 million and a turnover of less than R13 million as well as total employees of below 50, as defined in the National Small Business Amendment Act of 2003, or any other Act replacing it. However, if majority controlled, wholly owned or significant shareholders are large/medium companies, then the applicant will be viewed as a large/medium company, and will qualify for support under either the Matching or Partnership Scheme only.
The PPD Scheme is intended to promote innovation and technology development through the provision of financial assistance for the development of new products and/or processes. A new product is a product that has not been in the market before.
The financial assistance provided is in the form of a non repayable grant of between 50% and 85% (depending on the shareholding by BEE, women and persons with disabilities) of the qualifying costs incurred during the technical development stage with a maximum grant amount of two million Rand (R2 000 000) per project.
The Matching Scheme provides financial assistance in the form of a taxable non-repayable grant of between 50% and 75% (depending on the shareholding by BEE, women and persons with disabilities) of qualifying costs incurred in pre-competitive development activity associated with a specific development project up to a maximum grant amount five million Rand (R5 000 000).
Financial assistance under the Matching Scheme is also provided to large companies on a 50% matching basis. A large company is as defined in the Small Business Act of 2003 or any act replacing it. The incentives for BEE and women participation provided under the Matching Scheme do not apply to large companies.
Financial assistance under the Partnership Scheme is provided in the form of a conditionally repayable grant of 50% of the qualifying cost incurred during development activity with a minimum grant amount of ten million Rand (R10 000 000) per project, repayable on successful commercialisation of the project.
The Partnership Scheme repayment levy is calculated as the percentage of the projected value of sales, paid bi-annually, over a specific number of years (typically for 5 years starting at the first year of recorded sales) which will give a certain nominal Internal Rate of Return (IRR). The required IRR is periodically reviewed and is currently Prime + 3%. The levy percentage and repayment period is set at the time of the award. In considering support for a project under PII, there should be a clear indication of the causality (additionality) that will follow from the support.
The grant recipient may exit from the agreement at any time after the final milestone has been reached, subject to the repayment of the support amount plus such amount that will yield the IRR referred to above.
In the case of the SPII Partnership Scheme, an investigation fee, equal to 1% of the grant amount, is payable on signature of the agreement. This fee is refundable, without interest, at completion of the final milestone.
The SPII Partnership Scheme is based on similar rules as the Matching Scheme. There are no BEE incentives under the PII Scheme.
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