The world of industrial financing comes with its own jargon.

Glossary

Our Glossary is a handy reference of definitions for technical terms, financial concepts, and government acronyms you’ll encounter. It’s written in plain language so you don’t need to be a finance expert to understand.

Industrial Financing Glossary (A–Z)

This glossary explains industrial financing terms in clear, practical language for use on this website. It is written for businesses, entrepreneurs, and advisors exploring funding options, and focuses on what each term means in practice when applying for industrial finance in South Africa.

A

B

C

D

E

F

G

H

I

J

L

M

N

O

P

Q

R

S

T

U

V

W

A

Funding used to buy an existing business, factory, equipment, or shares. In industrial finance, this is usually supported when the acquisition will expand production, protect jobs, or strengthen local value chains.

A DTIC incentive supporting aquaculture production projects in South Africa through cost-sharing support for qualifying investments.

A DTIC incentive supporting qualifying investment in productive assets in the automotive manufacturing sector.

An NEF blended finance product supporting black-owned businesses to install alternative energy solutions.

The business or organisation applying for funding or insurance support.

How prepared a business is to apply for funding. This includes having financial statements, tax compliance, clear ownership, governance structures, and a well-defined project.

A DTIC incentive supporting agro-processing projects through cost-sharing grants linked to qualifying capital investment.

Funding used to purchase productive assets such as machinery, equipment, or plant that support or expand manufacturing operations.

B

An NEF sector-focused fund supporting qualifying projects in designated sectors in partnership with stakeholders.

A project that can demonstrate it is financially viable, has market demand, and can repay funding, while also delivering economic value such as jobs or localisation.

Broad-Based Black Economic Empowerment compliance level. Certain DTIC and IDC programmes require a minimum level or improvement commitment.

Adding value to raw materials through processing or manufacturing, rather than exporting them in raw form.

A DTIC cost-sharing incentive supporting black-owned manufacturing businesses expanding productive capacity.

A black-owned and black-controlled business that actively manages and grows an industrial or manufacturing operation.

A combination of different funding types, such as loans, grants, or equity, used to make a project more affordable and reduce financial risk.

A commonly referenced empowerment level that some funding programmes require businesses to meet or commit to achieving.

In export transactions, the foreign customer is contractually required to pay for goods or services.

C

Money spent on long-term assets such as machinery, equipment, buildings, or production upgrades.

The movement of money into and out of a business. Strong and predictable cash flow is essential for repaying funding.

A DTIC incentive supporting infrastructure that enables industrial development.

A formal request for payment under an insurance policy after a covered loss occurs, such as a buyer failing to pay.

A funding structure where the business contributes part of the project cost alongside one or more funders.

The risk that a customer does not pay due to insolvency, default, or unwillingness to meet contractual obligations.

Meeting legal, tax, labour, environmental, and reporting requirements. Non-compliance can delay or prevent funding approval.

Funding offered on more favourable terms than standard commercial finance, such as lower interest rates or longer repayment periods.

A loan that can later be converted into an ownership stake under agreed conditions.

A structure where the applicant funds part of the project and the agency funds a portion of qualifying costs.

An assessment of a buyer’s or borrower’s ability to repay their financial obligations.

D

Funding that must be repaid over time, usually with interest.

A public or state-supported funder that provides finance to promote industrial growth, job creation, and economic development.

The positive economic outcomes of a project, such as job creation, job preservation, localisation, or skills development.

A detailed review of a business and project, covering financials, market demand, governance, and compliance, to assess risk.

The process of accessing approved funding, usually in stages and subject to conditions being met.

E

A public entity that provides insurance to protect exporters, investors, and lenders against political and commercial risks in cross-border transactions.

An IDC MCEP facility supporting viable manufacturing firms facing temporary financial pressure.

Short-term funding aimed at stabilising viable businesses facing temporary financial difficulty, often linked to job protection commitments.

An IDC MCEP facility supporting manufacturing firms linked to job creation and sustainability.

The minimum requirements a business or project must meet to apply for a specific funding programme.

A DTIC programme supporting exporters through assistance for international marketing and investment missions.

Investments that help a business continue operating during power disruptions, such as solar systems, batteries, or energy-efficient equipment.

Capital invested in a business in exchange for partial ownership.

Capital investment where the funder takes a shareholding stake in the business. Common under NEF funding.

An IDC facility supporting manufacturing firms investing in energy resilience solutions.

An IDC facility supporting infrastructure related to energy resilience in the manufacturing sector.

Support measures that help exporters remain competitive or adjust to changes such as new tariffs or market disruptions.

Insurance that protects exporters or lenders if foreign buyers fail to pay or political events prevent payment.

F

An early assessment that tests whether a project is technically and financially viable before major investment is made.

An IDC fund supporting investment in the furniture manufacturing value chain.

Forecasts showing expected income, costs, and cash flow over time, used to assess whether funding can be repaid.

An interest rate that stays the same for the full term of a loan.

A customer located outside South Africa who purchases goods or services under an export contract.

A DTIC incentive supporting qualifying foreign film and television productions undertaken in South Africa.

G

A DTIC incentive supporting business process services and offshore service investment.

A provincial partnership programme supporting agro-processing businesses through blended finance.

Funding that does not need to be repaid, usually provided once specific conditions or milestones are achieved.

A structure where part of a loan converts into a grant if agreed outcomes, such as job creation, are met.

Industrial activities that support environmental sustainability and the transition to cleaner production.

The systems and structures used to manage a business responsibly, including decision-making and oversight.

H

The political and economic risk associated with the country where a foreign buyer or investment is located.

Funding that combines features of both debt and equity.

I

A development finance institution that funds industrial projects based on both financial viability and economic impact.

An NEF funding product supporting black-owned businesses at early-stage and growth phases through equity and loan funding.

Producing goods locally that were previously imported, strengthening domestic supply chains.

A defined investment that builds or expands manufacturing or production capacity.

How well a project supports national or sector priorities such as industrial growth, localisation, and employment.

The portion of risk that is protected under an approved insurance policy.

An ECIC insurance product covering South African investments in foreign countries against political risk.

J

New jobs created as a direct result of a funded project.

Maintaining existing jobs, particularly in businesses receiving turnaround or distress support.

L

An ECIC product covering risk on leased plant and equipment in cross-border transactions.

Repayable funding provided under defined terms. Common under IDC facilities and some NEF products.

The share of goods, services, and labour sourced from within South Africa.

Increasing the use of local suppliers and manufacturers instead of imported products.

The period over which a loan must be repaid.

M

A group of funding facilities aimed at improving productivity, competitiveness, energy resilience, and job creation in manufacturing.

Proof that customers are willing to buy the product or service, such as contracts, orders, or market research.

An IDC programme providing concessional facilities to manufacturing firms under structured criteria.

Medium & Heavy Commercial Vehicle Automotive Investment Scheme under DTIC.

A form of funding that sits between debt and equity, often used to close funding gaps.

A temporary pause on loan repayments, often during construction or early operational phases.

A DTIC incentive supporting manufacturing investment projects.

N

A development finance institution focused on increasing black participation in the economy through loans, equity, and blended finance.

An NEF programme providing business planning and advisory support without direct funding.

O

Active involvement by owners or shareholders in managing and running the business.

The funding the business puts into the project itself, such as cash, assets, or retained earnings.

P

A DTIC automotive incentive supporting qualifying production of people-carrier vehicles.

An IDC facility supporting investment in machinery and productive assets.

Funding used to purchase or upgrade machinery and production equipment.

A funding or incentive programme designed to encourage specific economic outcomes, such as job creation or localisation.

Risk arising from government actions or instability that may affect payments or investments.

A loan where the interest rate is linked to the prime lending rate.

Funding used to purchase inputs or materials needed to fulfil contracts or orders.

An evaluation approach that focuses on the specific project being funded rather than the overall business alone.

Q

Funding that behaves like equity in terms of risk but is structured as a loan or similar instrument.

R

An NEF funding product supporting rural and community-based enterprises.

A business’s ability to repay funding from its cash flow.

A condition requiring a business to avoid reducing its workforce during the funding period.

Separating project finances from the rest of the business to clearly track costs and cash flows.

The level of risk a funder is willing to accept when supporting a project.

S

How well a project fits within priority sectors targeted for economic development.

Testing how financial projections change if costs increase, prices drop, or demand is lower than expected.

A DTIC programme supporting industrial development within designated economic zones.

A standard classification used to identify a business’s main industrial activity.

Standard Industrial Classification category for manufacturing. Required for certain IDC MCEP facilities.

An ECIC product supporting insurance cover for smaller export transactions.

A small or medium-sized enterprise.

The minimum level of local participation required in a project or transaction.

An NEF programme supporting qualifying township retail businesses.

A DTIC incentive supporting product and process innovation development.

An NEF fund supporting large-scale strategic investment projects.

A DTIC incentive encouraging local supplier development and partnership initiatives.

Custom-designed funding that may combine different instruments and conditions.

Supporting the growth of local suppliers and increasing local procurement.

Insurance that protects a supplier against non-payment by a buyer in export transactions.

T

A sudden change in trade tariffs that affects export competitiveness.

An NEF sector fund supporting black-owned television and film production enterprises.

The total length of time over which funding must be repaid.

A DTIC incentive supporting collaborative research and skills development between industry and higher education institutions.

An NEF blended finance fund supporting black-owned tourism enterprises.

Efforts to increase inclusive participation in ownership, management, and supply chains.

An NEF funding vehicle supporting black economic participation and sector transformation.

Insurance assessed and approved for a specific export or investment transaction.

U

An NEF funding product supporting established black-owned businesses through acquisition finance, expansion capital and structured funding.

The process of assessing risk before approving insurance or funding.

V

The ability of a business or project to operate sustainably over the long term.

W

An NEF funding product supporting women-owned businesses through structured finance.

Short-term funding used to cover production-related operating costs.

An IDC MCEP facility supporting production-linked working capital for manufacturing firms.

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