On 26 January 2021 President Cyril Ramaphosa launched the Tourism Equity Fund to support businesses in the tourism sector crippled by COVID-19 and the subsequent lockdown.
The fund will provide a combination of grant funding, concessionary loans and debt finance, which will cater to the specific needs of black-owned businesses to acquire equity, invest in new developments or expand existing developments.
Financial support for projects will be provided on the following basis:
- Funding to acquire controlling equity in entities in the tourism sector;
- Funding of the assets of existing entities in the tourism sector for the explicit purpose of setting up a new entity operating in the sector;
- Asset finance and working capital that would be required in relation to the acquisition of the tourism entity for expansion or operational purposes;
- New developments and expansion projects as applicable and in relation to the identified tourism subsectors.
The eligibility and scoring criteria for applicants, places significant weight on majority black ownership (>51%) and level of black management control, as critical developmental factors. Other factors that will be considered include women ownership, youth ownership, jobs facilitated, location and stage of the business cycle.
The Fund will focus on tourism enterprises in the following sub-sectors:
- Accommodation, e.g. hotels, lodges, resorts and self-catering units and backpacker facilities;
- Hospitality and related services, e.g. conference and convention venues attached to a substantial accommodation element, privately owned attractions in already developed tourism nodes;
- Travel and related services, e.g. tour operators;
- Any other tourism-related products and initiatives not referred to above which supports tourism development imperatives and economic impact in terms of job creation, geographic spread and strengthening the tourism offering of South Africa.
To be eligible for funding:
- The enterprise has to be a registered legal entity in South Africa in terms of the Companies Act, 1973 (as amended);
- The entity needs to be 100% owned by South African citizens;
- The entity needs to be predominantly black owner-managed and controlled (51%);
- The entity requires to be registered and compliant with the South African Revenue Service;
- The entity must be operating in the qualifying sub-sectors.
Contact your SEESA BEE Legal Advisor to assist your business with any BEE queries that you might have, alternatively, “SMS” the word “SEESA” to 45776 with your query and a professional Legal Advisor will contact you.
About The Author:
Ivan Husselman started his career at SEESA in 2018 and is currently a Labour & BEE Legal Advisor at SEESA’sKlerksdorp office. He obtained his BCom Law degree from the North-West University Potchefstroom.