Broad Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Qualifying Contribution Type

Contribution Amount

Benefit Factor

Grant and Related Contributions

Grant Contribution

Full Grant Amount

100%

Direct Cost incurred in supporting enterprise development

Verifiable Cost (including both monetary and non-monetary)

100%

Discounts in addition to normal business practices supporting enterprise development

Discount Amount (in addition to normal business discount)

100%

Overhead Costs incurred in supporting enterprise development (including people appointed in enterprise development)

Verifiable Costs (including both monetary and non-monetary)

80%

Loans and Related Contributions

Interest-Free Loan with no security requirements supporting enterprise development

Outstanding Loan Amount

100%

Standard Loan to Black Owned EME and GSEs

Outstanding Loan Amount

70%

Standard Loan provided to other Beneficiary Enterprises

Outstanding Loan Amount

60%

Guarantees provided on behalf of a Beneficiary entity

Guarantee Amount

3%

Lower interest rate

Outstanding Loan Amount

Prime Rate – Actual Rate

Equity Investments and Related contributions

Minority Investment in Black Owned EME and QSEs

Investment Amount

100%

Minority Investment in Other Beneficiary Enterprises

Investment Amount

80%

Enterprise Development investment with lower dividend to financier

Investment Amount

Dividend Rate of Ordinary Shareholders – Actual Dividend Rate of Contributor

Contributions made in the form of human resource capacity

Professional services rendered at no cost and supporting enterprise development

Commercial hourly rate of professional

80%

Professional services rendered at a discount and supporting enterprise development

Value of discount based on commercial hourly rate of professional

80%

Time of employees of Measured Entity productively deployed in assisting beneficiaries

Monthly salary divided by 160

80%

Other Contributions

Shorter payment periods

Percentage of invoiced amount

Percentage being 15 days less the number of days from invoice to payment