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Cidb Financial Sponsorships

HomeCidb Financial Sponsorships

CIDB FINANCIAL SPONSORSHIPS

A CIDB financial sponsorship is a cash guarantee or financial undertaking made available to your company by a third party for future construction projects.

It can be used to boost the financial capability score of your company, thus boosting your CIDB grading score.

In this article, I will be showing you exactly how you can use a financial sponsorship to boost your CIDB grading score.

Cidb Financial sponsorship

The cidb will recognize any of the following as a financial sponsorship

  • A copy of a bank guaranteed cheque issued in the name of your company.
  • A financial guarantee issued by a reputable institution registered with the FSB.
  • A maximum of 15% of the net assets value reflected on the financial statements of a private sponsor, if sponsor has a 0% controlling interest in the applicant.
  • 100% of the available excess capital if sponsor is registered on the CIDB’s database.
  • 100%  of the required available capital if sponsor holds more than 50% of a control stake within the applicant.
  • 75% of the required available capital if sponsor holds less than 50% but more than 25% of a control stake within the applicant.
  • 50% of the required available capital if sponsor holds less than 25% of the control stake in the applicant.
  • 15% of the required available capital if the sponsor holds 0% control stake within the applicant.

HOW TO PRESENT A FINANCIAL SPONSORSHIP TO THE CIDB

There are 2 broad categories of financial sponsor ships.

The first category is in the form of a bank guaranteed cheque or an undertaking taken by a financial institution registered with the financial services board. If this type of financial sponsor ship is to be presented to the CIDB, a simple written description on your company’s letterhead together with its accompanying documentary proof such as the photocopied cheque or the financial acceptance letter issued by the financial institution can suffice to be forwarded to the CIDB.

The second category is the financial sponsor ship made from another company such as a close corporation or a PTY. If you get a sponsor ship of this type, the evidence required by the CIDB will consist of annual financial statements together with a board or members resolution passed by the company’s directors to that effect.

These documents must be submitted to the CIDB as documentary proof of the financial sponsor ship.

How is the financial sponsorship applied to the CIDB score?

The Rand value of the maximum financial sponsorship value recognized by the CIDB is added to the existing net assets value of your company in order to determine your new available capital.

Available capital is defined by the CIDB as your net assets value which consists of the fair Rand value of your assets  such as construction plant, equipment, motor vehicles & materials etc less total liabilities.

The higher your net assets value, the greater your available capital and as such, the greater the score on your CIDB rating.

OUR SERVICES

For assistance with applications to the CIDB that include the use of financial sponsor ships, we can be more than glad to assist you.

Fixonate is an accounting firm specializing in CIDB applications, renewals and upgrades.

For assistance, fill in our online application form below or call us on 072 547 5231 and we shall get back to you.

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