SETA Funding for Small and Medium Enterprises (SMEs) are vital contributors to South Africa’s economy, accounting for nearly 60% of employment in the private sector. However, many SMEs struggle with access to affordable skills training for their workforce. Fortunately, SETA funding for small businesses offers practical financial support to help SMEs grow their talent and meet industry demands.
In this guide, we explore how SMEs can access SETA funding, what types of grants are available, and how these initiatives support SME skills development in South Africa.
Why SETA Funding Matters for SMEs
Sector Education and Training Authorities (SETAs) are responsible for promoting skills development across different industries in South Africa. They manage grant funding derived from the Skills Development Levy (SDL) and reinvest it into training initiatives aligned with national and sectoral priorities.
For SMEs, accessing SETA funding can mean:
- Lower training and development costs
- Improved employee productivity and retention
- Enhanced compliance with BBBEE requirements
- Greater access to learnerships, internships, and workplace-based learning
Most importantly, SETA grants allow SMEs to build the skills needed to remain competitive in a rapidly evolving economy.
Types of SETA Grants Available to SMEs
SETAs provide two main categories of funding that SMEs can apply for:
1. Mandatory Grants
- Available to levy-paying employers
- Refunds 20% of the Skills Development Levy paid to SARS
- Requires submission of a Workplace Skills Plan (WSP) and Annual Training Report (ATR)
- Helps cover in-house or external training costs for existing employees
2. Discretionary Grants
- Open to all qualifying SMEs (including some non-levy-paying ones)
- Awarded at the SETA’s discretion based on strategic priorities
- Supports programmes such as:
- Learnerships
- Internships
- Artisan training
- Skills programmes
- Bursaries for unemployed youth
Discretionary grants are particularly useful for small businesses that want to train unemployed learners or new recruits while receiving support for stipends and training costs.
Can Small Businesses Apply for SETA Funding?
Yes. SETA funding for small businesses is accessible to both levy-paying and exempt employers, depending on the grant type and SETA requirements.
Here’s what SMEs need to be eligible:
- Be registered with the appropriate SETA
- If applicable, pay SDL to SARS and be tax compliant
- Appoint a registered Skills Development Facilitator (SDF)
- Submit the WSP and ATR (for mandatory grants)
- Respond to Discretionary Grant Windows published by the SETA
Even micro-enterprises and cooperatives can apply for discretionary grants—especially if their training proposal addresses scarce or critical skills within their sector.
How SETA Funding Supports SME Skills Development
Here’s how SETA grants directly benefit SME skills development:
| Benefit | How It Helps SMEs |
|---|---|
| Financial Relief | Covers training provider fees, learner stipends, and materials |
| Workplace Readiness | Funds programmes that help new employees gain practical skills |
| Customised Learning | Supports short skills programmes tailored to SME operational needs |
| Youth Employment | Encourages SMEs to absorb young, qualified learners after training |
| BBBEE Compliance | Helps SMEs improve their BBBEE scorecard through training spend |
By leveraging SETA support, SMEs can create a sustainable pipeline of skilled workers without carrying the full cost burden.
Steps for SMEs to Apply for SETA Funding
Here’s a simplified guide on how to access SETA funding for small businesses:
Step 1: Identify Your SETA
Each SME must be registered with the SETA that aligns with its industry. For example:
- AgriSETA – Agriculture
- CETA – Construction
- Services SETA – Service sector industries
- W&RSETA – Wholesale and Retail
- MerSETA – Manufacturing and Engineering
Use your business’s SIC code or core operations to find the correct SETA.
Step 2: Appoint a Skills Development Facilitator (SDF)
The SDF manages grant submissions, coordinates training, and communicates with the SETA. SMEs may use an internal staff member or hire an external consultant.
Step 3: Submit a Workplace Skills Plan (WSP) and Annual Training Report (ATR)
Mandatory for claiming mandatory grants. These documents:
- Identify training needs
- Report completed training
- Must be submitted annually by 30 April
Non-levy-paying SMEs may still qualify for discretionary funding without these documents.
Step 4: Monitor for Discretionary Grant Windows
SETAs open funding windows periodically (usually once or twice per year). These calls for proposals will specify:
- Funding focus areas (e.g., youth, women, digital skills)
- Eligibility criteria
- Documentation needed
- Application deadlines
Visit your SETA’s website regularly and subscribe to newsletters for updates.
Related: A Step-by-Step Guide for Employers to Claim a SETA Grant
Step 5: Submit the Grant Application
Complete the required application forms and attach:
- Business registration documents
- Tax clearance or PIN
- BBBEE affidavit (if available)
- Accreditation certificates (for training providers)
- Proposed training plan or learner details
Step 6: Track Approval and Sign an SLA
If your application is approved, you’ll receive a Service Level Agreement (SLA). This document outlines:
- Number of learners to be trained
- Training duration
- Payment terms
- Reporting requirements
Funding is often paid in tranches as milestones are achieved.
Challenges SMEs Might Face
While SETA funding is beneficial, SMEs may encounter the following hurdles:
- Complex application processes
- Lack of awareness or resources to appoint an SDF
- Unclear communication from SETAs
- Delays in funding disbursement
These challenges can be mitigated by working with experienced consultants or training providers, and by planning applications well in advance.
Practical Tips for SMEs
- Stay informed: Check your SETA’s website for funding announcements
- Start early: Gather documents and appoint an SDF ahead of deadlines
- Keep records: Save training attendance, invoices, and learner assessments
- Follow up: Don’t be afraid to contact your SETA if delays occur
- Build partnerships: Collaborate with accredited providers or host employers
Conclusion
SETA funding for small businesses is a powerful tool that helps SMEs overcome the barriers of training costs while contributing to national economic development. With proper planning and execution, SETA grants can support SME skills development through accredited programmes, on-the-job learning, and workforce transformation.
Whether you’re a start-up, micro-enterprise, or growing company, tapping into SETA opportunities can enhance your workforce and future-proof your business in South Africa’s competitive landscape.