A funding proposal is a concise, persuasive document that articulates your funding need, how you will use the funds, and the impact you will achieve. Unlike a full business plan, a proposal focuses specifically on the project or initiative requiring funding.
Who This Is For
- Businesses seeking grant funding (SEDFA, DTIC, sector-specific grants)
- Social enterprises applying for impact investment
- Entrepreneurs pitching to DFIs (IDC, NEF, DBSA)
- Businesses responding to specific funding calls
Funding Proposal vs. Business Plan
| Aspect | Business Plan | Funding Proposal |
|---|---|---|
| Length | 15-30 pages | 5-15 pages |
| Scope | Entire business strategy | Specific project or funding need |
| Focus | Market, competition, operations | Problem, solution, impact |
| When Used | Large loans, equity investment | Grants, project funding, impact investment |
| Tone | Analytical, comprehensive | Persuasive, outcome-focused |
Funding Proposal Structure
1. Executive Summary
A 1-page overview of your proposal. Write this last, but place it first.
What to Include
- Organization name and background (2-3 sentences)
- The problem you are addressing
- Your proposed solution
- Amount requested and use of funds
- Expected outcomes and impact
Example: Executive Summary
GreenTech Solutions seeks R2 million in growth capital to expand solar home system manufacturing and enter the Western Cape market. Currently, 7 million South African households lack reliable electricity access, spending R500-R1,000 monthly on candles, paraffin, and phone charging.
This funding will enable us to increase production from 150 to 500 units per month, create 12 new jobs, and provide clean energy to an additional 5,000 households by 2027. We project R25 million annual turnover by Year 3, with loan repayment completed within 48 months.
2. Problem Statement
Clearly articulate the problem your project addresses. Use data and evidence.
What to Include
- The problem: What challenge exists?
- Who is affected: Target beneficiaries with numbers
- Current impact: Costs, inefficiencies, missed opportunities
- Why it matters: Broader social/economic implications
- Evidence: Statistics, research, case studies
3. Proposed Solution
Describe your solution and why it is the best approach to solving the problem.
What to Include
- Your solution: What you will do
- Why this approach: Evidence of effectiveness
- How it works: Implementation methodology
- Unique advantages: Why your solution is better than alternatives
- Alignment: How it aligns with funder priorities (jobs, B-BBEE, sector focus)
4. Funding Request
State exactly how much you need and what funding type you are seeking.
What to Include
- Total amount: e.g., "We are requesting R2,000,000"
- Funding type: Grant, loan, equity, or blended finance
- Repayment terms (for loans): Proposed term, interest rate, security offered
- Co-funding: Other funding sources (own contribution, other funders)
Example: Funding Request
We request R2 million in loan financing over a 5-year term. We propose a 12-month grace period to allow for equipment installation and market entry, followed by 48 months of equal monthly repayments.
We are contributing R500,000 in equity (owner funds) and have secured R300,000 in pre-orders from existing customers in the Western Cape market. Total project budget: R2.8 million.
5. Detailed Budget
Provide a line-by-line breakdown of how funds will be used. Be specific and realistic.
Example: Budget Breakdown
| Category | Item | Quantity | Unit Cost | Total |
|---|---|---|---|---|
| Equipment | CNC Panel Cutting Machine | 1 | R500,000 | R500,000 |
| Assembly Line Equipment | 1 set | R300,000 | R300,000 | |
| Working Capital | Raw Material Inventory (3 months) | - | - | R400,000 |
| Operating Expenses Reserve | - | - | R100,000 | |
| Marketing | Western Cape Market Entry Campaign | - | - | R200,000 |
| Vehicle | Delivery & Installation Truck | 1 | R350,000 | R350,000 |
| Training | Staff Training & New Hires | 12 people | R12,500 | R150,000 |
| TOTAL FUNDING REQUEST | R2,000,000 | |||
6. Implementation Plan
Show that you have a realistic plan to execute the project. Include timelines and milestones.
What to Include
- Timeline: Start and end dates for the project
- Phases: Break project into logical stages
- Milestones: Key achievements and dates
- Responsible parties: Who does what
- Risk mitigation: Potential risks and how you will address them
Example: Implementation Timeline
| Phase | Activities | Timeline | Milestone |
|---|---|---|---|
| Phase 1: Setup | Equipment procurement & installation, staff recruitment | Months 1-3 | Production line operational |
| Phase 2: Ramp-Up | Production testing, quality certification, initial WC sales | Months 4-6 | 250 units/month capacity |
| Phase 3: Market Entry | Marketing campaign launch, distributor partnerships | Months 7-12 | 500 WC installations |
| Phase 4: Scale | Full production, pay-as-you-go model launch | Months 13-24 | 500 units/month sustained |
7. Impact and Outcomes
Define measurable outcomes that demonstrate the project's success and impact.
What to Include
- Output metrics: Tangible deliverables (units produced, people trained, installations completed)
- Outcome metrics: Changes resulting from outputs (households with clean energy, jobs created)
- Impact metrics: Long-term social/economic benefits (carbon emissions reduced, economic activity generated)
- Measurement plan: How you will track and report progress
Example: Impact Metrics
Outputs (What we will deliver)
- 6,000 solar home systems manufactured and installed (Year 1-3)
- 12 new permanent jobs created (8 in manufacturing, 4 in installation)
- 2 Western Cape distribution partnerships established
Outcomes (Changes achieved)
- 5,000 additional households with reliable electricity access
- R12 million saved by customers on alternative energy sources
- 98% customer satisfaction maintained
Impact (Long-term benefits)
- 1,200 tons CO2 emissions avoided annually
- Economic activity generated: R25 million turnover by Year 3
- Improved quality of life for 20,000+ individuals (avg 4 per household)
8. Sustainability Plan
Show how the project will continue after initial funding. Funders want to see long-term viability, not dependency.
What to Include
- Revenue generation: How the project earns income
- Cost recovery: When project becomes self-sustaining
- Future funding: Diversified funding sources
- Organizational capacity: Systems and skills to maintain operations
9. Organizational Capacity
Demonstrate that your organization has the ability to execute the project.
What to Include
- Track record of similar projects
- Management team credentials
- Financial stability (existing turnover, assets)
- Partnerships and support networks
- Certifications and compliance (B-BBEE, tax, CIPC)
Writing Tips
- Be specific: Use numbers, names, dates, and concrete details
- Show, don't tell: Provide evidence instead of claims
- Use plain language: Avoid jargon and technical terms unless necessary
- Be compelling: Tell a story that connects emotionally
- Follow instructions: Adhere to funder-specific formats and page limits
- Proofread: Multiple times, by multiple people
Common Mistakes to Avoid
- Vague problem statement: Not clearly defining the problem
- Solution in search of a problem: Proposing without demonstrating need
- Unrealistic budget: Costs that don't add up or are inflated
- No impact measurement: Failing to define success metrics
- Ignoring funder priorities: Not aligning with what the funder cares about
- Missing sustainability plan: No explanation of long-term viability
Funder-Specific Tips
Tailor Your Proposal to Funder Priorities
- SEDFA: Emphasize job creation, B-BBEE, and SMME development
- IDC: Focus on industrialization, exports, and manufacturing
- NEF: Highlight black ownership, empowerment, and transformation
- Jobs Fund: Lead with employment numbers (direct and indirect jobs)
- DTIC incentives: Show alignment with sector priorities and local content
- NYDA: Emphasize youth employment, skills development, entrepreneurship
Next Steps
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