Funding Criteria

The 4IRI provides funds to young black tech entrepreneurs and groups with the aim of facilitating access to finance in support of impactful, innovative and ground-breaking technological solutions. The funding and investment activities of the 4iri are guided by the funding and investment policy that seeks to ensure that the funds create real economic empowerment for tech entrepreneurs especially those who are looking to scale and commercialize, and in the process, help create youth job opportunities. 

Each application for funding is assessed in terms of the following criteria:

  • Impactful, innovative and ground-breaking technological solution irrespective of the industry the idea disrupts
  • Commercial viability of the business case being presented
  • The business (SMME) must comply with all relevant laws and regulations
  • There must be operational involvement at the managerial and board levels by black people
  • Minimum percentage of black ownership or interest of 50.1% is a requirement
  • The business must be able to repay 4IRI wholesale funding advanced (Maximum loan R500 000 per business – SMME)
  • The business must create a reasonable number of jobs
  • Possibility of co-funding with private or public sector institutions is encouraged in all projects for equity stakes in the business (SMME)

Once your application has been received and found to meet the above conditions, it will then need to agree to the following terms before funding is approved:

Financial support:

  • 4iri retains an equity stake in the Tech SMME as collateral, the percentage of the stake that the incubator holds as collateral is determined by the de-ricking committee which amongst other assessment procedures conducts a valuation of the SMMEs to establish market value and rand value of each share of the Tech SMME business
  • Repayment terms and period will be determined and the Tech SMME is given an opportunity to purchase back the equity used as collateral by the incubator with each successful repayment resulting in the SMME being empowered to revert to majority ownership of its business
  • For time value of money purposes, interest is charged on the loan advanced to the Tech SMME and the rate is currently prime plus 3%
  • Repayment period is strictly on a case-by-case basis, each business gets its terms strictly based on its merits and stage of economic performance
  • Approved funds are advanced in instalments, where there are invoices and debt repayments to be paid, the incubators pay directly to the third parties and a portion of cash is paid directly to the Tech SMME for liquid capital and other operating business needs.
  • A maximum for 4 payments will be made for whatever the approved amount of the loan is, the Tech SMME needs to demonstrate that the previous payment made is utilised to the satisfaction of the incubator and the funds are used for the intended purpose before the next payment is made.

Non-financial support: 

  • The incubator retains between 2.1% and 5% of the Tech SMME in order to ensure these vital support services are constantly available and offered to the business
  • The Tech SMME may continue to benefit from these services even beyond its incubation and funding repayment period

The non-financial support offering is broken down into two components, The pre funding business support and post funding business support:

Pre-Funding Support:                    

Applicants for funding may be excellent entrepreneurs, but often struggle to navigate the necessary application procedures and to manage their businesses. 4IRI therefore assists with funding advice, business planning and general assistance to help ensure that applications are of sufficient quality to complete all steps in the application process.

The first point of contact for many potential incubates, the Pre funding business support’s primary functions are to:

  • Information on 4IRI funding & non-funding solutions
  • Provide guidance in drawing up funding applications
  • Identify applications which meet the 4IRI’s funding criteria
  • Keep the SMMEs informed on the progress of their applications
  • Advise applicants on qualifying criteria and application process

Post- Funding business support

4IRI has established structures to monitor its SMMEs for risk and provide advice when needed. Although TECH start-ups are inherently higher risk, the rewards for success are jobs and increased capital for further TECH start-ups.

The post funding business support’s functions are as follows:

  • Regular portfolio monitoring
  • Regular collections management and credit control (Tech Fund loan repayment)
  • Mini restructure of distressed funded businesses (SMMEs)
  • Turnaround and rescue of highly distressed funded businesses (SMMEs)
  • Legal and workouts
  • Active board seats guided by collateral stake
  • Mentorship and technical assistance
  • Valuations of investee companies
  • Knowledge Management
  • IT system development


Minimum qualifying criteria 

  • You need credit approval from the 4IRI investment committee.
  • Must have a valid off take contract agreement.
  • Valid quotations.
  • Your business should be a small to medium-sized enterprise (SME) as defined by the Department of Trade and Industry (DTI) – includes start-ups and existing businesses.
  • You need to be a South African citizen, permanently residing in South Africa.
  • As the loan applicant, you need to be fully involved in the day-to-day operation of the business.
  • You need to have the skills and/or expertise relevant to your business and/or the industry or sector.
  • You need to have a well-researched business plan or business profile.
  • Your business should show profitability through historical financials (if existing business) and/or a realistic cash flow forecast.
  • Directors of the business must be credit worthy and agree to stand surety for the business loan in their personal capacity
  • you need a loan between R100 000 and R500 000 with a maximum loan term of five years.
  • Loans are paid directly to suppliers and only a small portion is paid directly to business for operational day to day business needs.
  • Loans are paid in 4 equal instalments with each payment requiring sufficient evidence of the previous payment being used for its intended purpose.