Production Incentive can benefit SMME’s…

13 Dec by LoansForBusiness12132

Production Incentive can benefit SMME’s…

The Production Incentive programme consists of an Upgrade Grant Facility, which is meant to focus on competitiveness improvement and an Interest Subsidy for Working Capital Facility which is meant to support working capital requirements resulting from past and future upgrading interventions The Production Incentive programme is a market-neutral incentive resulting in an incentive benefit equal to 7.5% for the year based on a company’s Manufacturing Value Addition (MVA). The MVA calculation must be based on audited financial statements not older than 15 months.

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Upgrade Grant Facility

  • An Upgrade Grant is available to provide financial support to the industry to assist it in attaining higher levels of competitiveness.

An Upgrade Grant can be used for the following:

  • upgrading of existing plant and equipment;
  • acquisition of new plant and equipment which will have the effect of improving the overall competitiveness of the applicant;
  • developing people;
  • improving manufacturing processes;
  • optimising materials used;
  • developing new products; or
  • market development (excluding normal day to day marketing
  • expenses such as advertising) as part of a clearly defined strategy.
  • An Upgrade Grant can also partly be used in conjunction with the Competitiveness Improvement Programme (CIP). Companies qualifying for an Upgrade Grant have the option of using it towards funding their own contribution of 25% (Cluster level application) or 35% (Company level application) required in terms of the CIP up to a maximum of 100% for Small and Medium Enterprises (SMEs) and 75% for others.

Benefits of the Production Incentive Programme

• Tax Free Cash Benefit
• Benefit may be applied to qualifying historical and future expenditure
• Calculated on the Manufacturing Value Addition (MVA)
• Current incentive is 7.5% of calculated MVA

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Going forward, Business Grants and Dream Team Capital can play an even more important role in the co-ordination, integration and reporting on the consolidated performance of the various fragmented energy efficiency initiatives in the country. Contact us today for professional assistance in streamlining your application for the Production Incentive programme grant.