Industrial Development Corporation (IDC) - Tourism & Services

This fund focuses on the tourism sector and provides asset-based finance.  Whilst the bulk of investments have been made in businesses in the accommodation sub-sector, the IDC also supports businesses operating in business and adventure tourism, as well as projects that develop township tourism.

Preference is given to businesses owned by historically disadvantaged people. The IDC looks for projects that have a significant impact on townships and rural areas and that meet the Tourism BEE Charter requirements.

Funding is considered for Tourism businesses looking to invest in the following areas:

• High impact tourism ventures
  
• Tourist attractions
  
• Niche product offerings
  
• Hotel developments
  

Funding is available as a five to ten-year loan or equity finance, and the IDC will work with you to structure the most suitable finance solution.

Eligibility criteria

• Projects that show profitability and sustainable commercial viability.
  
• Projects seeking the financing of fixed assets and capital expenditure (this means an asset that has a long life such as land, buildings, equipment, machinery, leasehold improvements, and other such items).
  
• A product or facility for which there is an identifiable demand from a quantifiable market.
  
• Projects that have a significant developmental impact, such as job creation, empowerment and rural development.
• The business owner must be able to provide a minimum of 40% of the total funding need. BEE business owners may qualify for a reduction in the required owner contribution.
  
• The business must be profitable.
  
• The project must be able to show that it will be profitable and sustainable.
  
• Security is required. This might include the registration of bonds over fixed and movable assets and a pledge of personal surety.

Application process

Fill in their Online Contact Form. It is important to read through IDC's minimum requirements as well as the specific criteria for this fund before submitting an application as there are many restrictions and processes that you will need to take into account. Alternatively, you can contact your nearest branch and meet with a consultant to discuss your options.

PLEASE NOTE: You must have a comprehensive marketing study that as a minimum defines the target market, key drivers of demand and analyses the industry landscape.

Financial forecasts until the project reaches maturity (at least 3 years post commencement of operations).

• Appropriate zoning for the property.
  
• Approved building plans with detailed bill of quantities.
  
• Approved Environmental Impact Assessment and/or Geotechnical Report.
  
• Suitably qualified construction company has been identified and JBCC/FIDIC contract signed.
  

Please note that the IDC mandate excludes applications for less than R1m. Should you wish to apply for less than R1m please contact Sefa here.