SPII funding for inventors
Need funding to design, protect, prototype and SABS certify your product?
Look no further than SPII.
SPII funding is:
- Quick (2-3 month turnaround time)
- Free (in the form of a non-repayable grant)
- Simple to access (with little red tape)
SPII Financial Assistance:
| SPII Scheme | Type of funding | Funding limit | 0-25% BEE ownership | 25,1%-50% BEE ownership or >50% ownership by women / disabled persons | >50% BEE ownership |
|---|---|---|---|---|---|
| PPD Scheme | Non-repayable grant | R 1m | Reimburses 50% of qualifying costs paid | Reimburses 75% of qualifying costs paid | Reimburses 85% of qualifying costs paid |
| Matching Scheme | Non-repayable grant | R 3m | Reimburses 50% of qualifying costs paid | Reimburses 65% of qualifying costs paid | Reimburses 75% of qualifying costs paid |
NOTE: In terms of the PPD Scheme, an upfront payment of 2% of qualifying costs may be paid to finance project start-up
SPII Qualifying Criteria:
| Qualifying criteria | PPD Scheme | Matching Scheme |
|---|---|---|
| Type of applicant | South African registered company with:
(i.e. SSMEs) |
South African registered company with:
(Including SMMEs) |
| Novelty | National novelty, i.e. the product is new to South Africa | International novelty, i.e. the product is new to the world |
| Development period | Not regulated | Projects expected to be completed within 6 months from the date of application will not be considered |
Additional qualifying criteria common to both schemes:
- Development and production must be based in South Africa
- Related patents must be registered in the applicant’s name and the applicant must retain ownership of intellectual property for 3 years from completion of the project
- Applicant must submit a SARS Tax Clearance Certificate together with the application
- No parallel applications – applicants may only have one funding application in the pipeline at any given time
- The product developed must comply with relevant National and International Standards
SPII Disqualified Projects:
| PPD Scheme | Matching Scheme |
|---|---|
| Projects more than 70% complete at time of application | Projects more than 50% complete at time of application (an exception may be made for applicants with total assets < R5m) |
Disqualified projects common to both schemes:
- Product/process development for a single client (e.g. a new container to be supplied exclusively to Woolworths)
- Basic and applied research
- Where the SPII grant contribution is less than 20% of the total project cost
- Projects receiving other government funding
- Military projects, unless they have a substantial commercial application
- Projects where commercialisation is restricted by licensed technology (e.g. a third party patent will prevent commercialisation of the developed product)
SPII Qualifying / Disqualified Costs:
SPII will only reimburse the following “qualifying” costs incurred (i.e. spent) after the date on which the SPII application is submitted:
| Cost | PPD Scheme | Matching Scheme |
|---|---|---|
| Applicant’s own salary and labour | Includes maximum hourly rate calculated at:
(total annual salary package) / (2,016 working hours per annum) Limited to R250 per hour But:
Excludes:
|
Includes maximum hourly rate calculated at:
(total annual salary package) / (2,016 working hours per annum) Limited to R295 per hour But:
Excludes:
|
| Materials | Includes only direct cost of materials for developing the prototype or model
Excludes materials for production or inventory |
Includes only direct cost of materials for developing the prototype or model
Excludes materials for production or inventory |
| Subcontractors |
|
|
| Tooling | Includes cost of design, compiling mechanical drawings, building models and prototypes and related tooling costs
Excludes costs relating to manufacturing, production or general purpose use Limited to 50% of total cost |
Includes cost of design, compiling mechanical drawings, building models and prototypes and related tooling costs
Excludes costs relating to manufacturing, production or general purpose use |
| Capital equipment | Includes Items required specifically for development | Includes Items required specifically for development |
| Computer hardware and software | Includes computer hardware and software costs used in the development process
Limited to 5% of grant value, up to a maximum of R25,000 |
Generally, excludes costs related to computer hardware or software
Where, software forms an integral and inseparable part of, and is essential for functioning of the prototype and eventual product, it may be approved Licensed software is always excluded |
| Patents | Includes costs to file patents, but limited to 20% of total cost
Excludes costs to defend patents |
Includes costs to file patents, but limited to 20% of total cost
Excludes costs to defend patents |
| Travel | Local travel cost limited to R8,000
Foreign travel cost limited to R30,000 Limited to one employee (directly involved in technical development) per trip flying economy class only Excludes:
|
Local travel cost limited to R6,000
Foreign travel cost limited to R25,000 Limited to one employee (directly involved in technical development) per trip flying economy class only Excludes:
|
| IP (excl. software) licensing (local and foreign) | Limited to 10% of total cost | Limited to 10% of total cost |
| Trials | Limited to 50% of total cost
Excludes cost of marketing trials |
Limited to 20% of total cost
Excludes cost of marketing trials |
| Documentation | Includes cost to prepare development-related user, maintenance and specification manuals
But excludes cost to print such documents Also excludes cost of marketing-related documents such as brochures and pamphlets |
Includes cost to prepare development-related user, maintenance and specification manuals
But excludes cost to print such documents Also excludes cost of marketing-related documents such as brochures and pamphlets |
| Quality assurance | Includes cost of:
Excludes cost of company ISO certification |
Includes cost of:
Excludes cost of company ISO certification |
| Product certification | Includes cost of product quality or other certification (e.g. SABS, DIN, CE) | Includes cost of product quality or other certification (e.g. SABS, DIN, CE) |
SPII Absolute Disqualified Costs:
| PPD Scheme | Matching Scheme |
|---|---|
But rent in respect of business premises is limited to R12,000 p.a. and only for the duration of a project not exceeding 12 months |
|
FAQ:
- What is the effect of SPII’s reimbursive scheme on my cashflow?
Applicants must break their projects into three Milestones. Following completion of each Milestone, a SPII consultant will review expenditure, confirm Milestone completion and authorise reimbursement of related qualifying costs incurred. Applicants must have sufficient cash flow to finance the period between: (i) the date on which the applicant pays for qualifying costs; and (ii) the date on which the applicant is reimbursed 50/65/75/85% of such costs by SPII - Do I actually have to pay a service provider before SPII reimburses me, or is an invoice sufficient?
Before SPII reimburses you any amount, SPII must first confirm that the qualifying cost was actually paid. To do this, the SPII consultant will review your bank statements. - What if my development costs exceed the amounts in my SPII application?
SPII will only reimburse you up to the amount detailed in your application. The additional costs are for your own account - What if my development costs are less than the amounts in my SPII application?
This is no problem. SPII will merely reimburse you 50/65/75/85% of your qualifying costs actually incurred. You should therefore presume “the worst case scenario” when preparing a SPII application. - What if I do not achieve the milestones committed to in my SPII application?
You can be late in achieving a Milestone, but don’t even consider abandoning a Milestone. You must achieve the milestones committed to. Else, you will be required to refund SPII - What if I have two products that need development?
You can only have one product in the “SPII system” at a time, so complete development of one product, then submit a new SPII application for your second product
Reporting Requirements
Following completion of a project, applicants must for a period of 3 years complete and submit annual reports to SPII including related sales and employment data