There is help at hand. Several financial schemes to alleviate the devastating economic impact of Covid-19 on an SMME (Small, Medium-sized and Micro Enterprise) have been put in place by the national and provincial government, the City of Cape Town, other agencies and foundations. We unpack some of them.
DEBT RELIEF FINANCE SCHEME
The Department of Small Business Development says this scheme is aimed at SMMEs that are “negatively affected, directly or indirectly due to the coronavirus pandemic”.
To qualify, an SMME must show “the direct link of the impact or the potential impact of Covid-19 on business operations,” says Small Business Development Minister, Khumbudzo Ntshavheni in an article by Business Tech. He adds: “This facility will also assist entities to acquire raw material, pay labour and operational costs. All these interventions will be structured to match the patterns of the SMMEs' cash flows, as well as the extent of the impact suffered.”
To access the funding, SMMEs must be registered and compliant with the South African Revenue Service (SARS) and the Unemployment Insurance Fund (UIF). They must have been registered with the Companies and Intellectual Property Commission (CIPC) by at least 28 February 2020, be 100 % owned by South African citizens and 70 % of their employees must be South Africans. In addition, SMMEs must follow this procedure:
- Register on www.smmesa.gov.za as only SMMEs on the database will be considered.
- Complete an online application form.
- Upload required supporting documents such as a business profile, certified ID copies of directors, three months' bank statements, latest annual financial statements, copy of a lease agreement or proof ownership if applying for rental relief.
Check out the full Debt Relief Finance Scheme criteria here.
BUSINESS GROWTH AND RESILIENCE FACILITY
The Business Growth and Resilience Facility is aimed at SMMEs who locally manufacture or supply medical products needed to deal with Covid-19 as well as products such as sanitisers, detergents and toilet paper.
“It will offer working capital, stock, bridging finance, order finance and equipment finance. The funding amount will be based on the funding needs of the actual business,” says Minister Ntshavheni.
The criteria for applying are more or less the same as those outlined above and registering on www.smmesa.gov.za is essential.
It’s important to note that for both the Debt Relief Finance Scheme and the Business Growth and Resilience Facility, SMMEs owned by women, youths and people with disabilities will be given priority. Check out the full Business Growth and Resilience Facility criteria here and complete this online application form.
SEFA-DEBT RESTRUCTURING FACILITY
SMMEs funded by the Small Enterprise Finance Agency (sefa) — which provides financial products and services to qualifying SMMEs and co-operatives — can access relief in the form of the sefa-Debt Restructuring Facility provided they’re able to show that their businesses have been directly affected by Covid-19. They must be registered on www.smmesa.gov.za.
Says Minister Ntshavheni: “A payment moratorium or holiday will be given to the qualifying SMMEs for a period of a maximum of six months in efforts to reduce the instalment burden of loan obligations on the affected SMMEs.” Contact sefa for more information.
TOURISM RELIEF FUND
To assist SMMEs in the tourism and hospitality sector, the Department of Tourism has made R200 million available. Businesses that will be considered include those offering accommodation, restaurants (not attached to hotels), conference venues (not attached to hotels), professional catering, attractions as well as travel and related services. To qualify, SMMEs in the tourism and hospitality sector must meet these requirements:
- Be registered with the CIPC
- Have turnover that doesn’t exceed R2.5 million per year
- Must have a valid tax clearance certificate
- Must have guaranteed employment for a minimum number of staff for three months
- Must have proof of minimum wage compliance
- Must provide proof of UIF registration for employees employed by the business
- Must be in existence for at least one business financial year
- Prove that relief is required as a result of the impact of Covid-19
- Must submit financial statements
- Indicate the intended use of the resources
To apply, complete this online application form. SMMEs can also email callcentre@tourism.gov.za or call 0860 868 747.
COVID-19 TEMPORARY EMPLOYER/EMPLOYEE RELIEF SCHEME (TERS)
The Department of Labour is assisting employees and employers affected by Lockdown and has made R30 billion available. Called the Covid-19 Temporary Employer/Employee Relief Scheme (Ters), the scheme administered by the Unemployment Insurance Fund (UIF) is accessible to workers and employers who pay UIF. The financial relief will be available for up to three months. To claim, employers must send applications to COVID19ters@labour.gov.za. Thereafter, an automated response will provide the next steps. More information is available on www.ufiling.co.za/uif/ and here. It’s also important to note that applications must be submitted before Lockdown is lifted.
SPAZA SHOPS AND GENERAL DEALERS SUPPORT SCHEME
The Department of Small Business Development is working in partnership with Nedbank to assist spaza shops and general dealers who hold a valid trading permit (including temporary) or business license in the case of a general dealer. To apply, shop owners must visit a Nedbank branch with a valid South African ID and original municipal trading or business license. To ensure beneficiaries receive the help they need quickly, Nedbank will also have desks at service points at all Boxer stores nationwide. For more information, email call 0860 663 7867 or email to Spazasupport@dsbd.gov.za.
SPECIAL TAX MEASURES
The Ministry of Finance has also announced exceptional tax measures to assist businesses. These include:
- Increasing the maximum amount of the Employment Tax Incentive (ETI) programme that employers can claim for the next four months for employees eligible under the current ETI Act from R1 000 to R1 500 in the first qualifying 12 months and from R500 to R1 000 in the subsequent 12 qualifying months.
- Giving companies R500 for all workers up to the age of 65 who earn less than R6 500 a month. Employers will get R500 for each young worker who has already been covered by ETI payments for two years.
- Ensuring SARS fast-tracks payments of employment tax incentive reimbursements from twice a year to monthly so employers have access to cash.
- Allowing tax compliant businesses with a turnover of R50 million or less to delay
20 % of their employees’ tax liabilities over the next four months, plus a portion of their provisional corporate income tax payments without penalties or interest over the next six months.
To find out more details about how these measures will work, contact SARS or read more here.
RELIEF PERTINENT TO CAPE TOWN
- COVID-19 CONTENT CENTRE: The Western Cape’s Economic Opportunities and Asset Management Ministry has set up a Covid-19 Content Centre to help WC businesses. To receive support, visit supportbusiness.co.za or email supportbusiness@wesgro.co.za.
- RATES RELIEF FOR GUEST HOUSES AND B&Bs: The City of Cape Town is offering guest houses and B&Bs an option of applying to change their property classification to ease the impact of Covid-19. This change could help to halve rates bills. To apply, complete the Rates Classification Form and submit it to Valuations.RCC@capetown.gov.za. To have your accommodation declared for essential services and isolation cases, email mushfieqah.salie@westerncape.gov.za for further information.
- RELIEF FOR PROPERTY OWNERS AND BUSINESSES: To assist individuals and businesses that have had sudden reductions in their incomes, the City is adjusting the processes of its indigent, disabled and pensioner rebate applications “to enable those severely affected to qualify more quickly for these rebates”. Application details are available here.
- GREEN OUTCOMES FUND (GOF): Green SMMEs, involved in sustainable solutions to minimise impact on the environment, are encouraged to apply for relief from the
R488 million Green Outcomes Fund (GOF) that was launched in January to grow green SMMEs in South Africa. More information about the fund and application process is available here.
- JOB OPPORTUNITES FOR YOUTHS: The City’s Department of Enterprise and Investment is urging youths looking for job opportunities after Lockdown to register for free on Lulaway’s online recruitment portal. Placement is usually for jobs in the transport, wholesale, retail and call centre sectors. If new vacancies relevant to the permitted activities become available during Lockdown, Lulaway will contact those registered on its database for placement. Register here.
ADDITIONAL COVID-19 RELIEF FOR BUSINESSES
- SAPOA RELIEF PACKAGE: The South African Property Owners Association (SAPOA), which represents the commercial and industrial property industry, has devised a relief package for SMMEs and all other retail tenants. The initiative, which will be rolled out by landlords nationally, requires retail tenants to not retrench staff during the relief period. In addition, tenants whose accounts were in good standing as at 29 February 2020 won’t be evicted for the next two months and retailers in good standing who were prevented from trading due to Lockdown will get assistance in the form of rental discounts based on the severity of impact. View the full details here.
- OPPENHEIMER FUND: South African billionaire, Nicky Oppenheimer, donated R1 billion to support government’s efforts to help small businesses affected by the pandemic. Small businesses can apply directly from Absa, Standard Bank, FNB or Nedbank. Check out the criteria here.
- RUPERT FUND: Johann Rupert, another South African billionaire, donated R1 billion to aid government’s efforts to assist small businesses. The Rupert Fund is being administered by Business Partners Limited. Unfortunately, this fund is already oversubscribed and is not accepting any more applications at present.
- PAYMENT HOLIDAYS: Several South African banks are offering payment holidays to their clients. Both businesses and individuals can inquire about a break from repayments on a credit agreement for a period of one to three months.
- 10X COVID-19 SURVIVAL TOOLKIT: The toolkit by 10X is regularly updated and includes the latest articles to help businesses cope and grow in a time of crisis.
- FACEBOOK FOR SMALL BUSINESS: The social media giant has useful resources on its Facebook for Business portal. Facebook is also offering $100 million (R1.8 billion) in cash grants and ad credits to 30 000 small businesses in the countries in which it operates. Application details will be announced soon.
- HOOTSUITE: Social media management platform, Hootsuite, is offering its professional version of social media management software at no cost until 1 July 2020 to help businesses stay connected to their customers and audiences during the physical distancing period.
- VIDEO CONFERENCING TOOLS: While Zoom has lost popularity of late, to assist businesses who need to work remotely at this time, the video conferencing giant announced that calls of over 40 minutes will not infer financial charges. To assist with remote work, Microsoft is making its premium version of Microsoft Teams available for free for six months. Read this article for 10 video conferencing options.
- LINKEDIN: LinkedIn is offering a free course that consists of 16 lessons on how employers can set themselves and their teams up for success when working remotely.
- HEADSPACE: To help employers and employees alleviate stress and anxiety, Headspace, is offering free meditations to listen to any time.
IMAGES: CCID