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Financial Help for Small Businesses

Most, if not all, small, locally owned businesses are struggling during the COVID-19 Crisis and the lock downs being enforced around the world.

Read on for some information about possible sources of financial assistance that East London locally owned businesses may be able to access.

Before we start, this article will be updated as information is updated in the marketplace, please sign up below to be kept up to date.

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South African Assistance

South African Future Trust

The SAFT is an independent trust, set-up by the Nicky Oppenheimer and Jonathan Oppenheimer, in association with the South African Government as well as private industry.

The initial aim of the SAFT is to assist employees of Small, Medium, and Micro Businesses to ensure that they do not lose their jobs, or income as far as possible.

The trust will distribute funds directly to employees of qualifying SMME’s, without the employee carrying any liability. The employer will be responsible for paying the funds back to the trust, at very reasonable terms.

For more information, head over to the South African Future Trust website.

Summary
Fund ValueAimed AtRelief OfferedProcess
R 1 BillionSMME’s
– Minimum of 2 years trading
– In Good standing at end Feb 2020
– < R 25 Mill turnover
– Proof of impact of COVID-19
– R750.00 weekly wage paid directly to each employee
– No limit on number of employees
– Employees NOT liable for repayment
– Only for paying of permanent employees
– Interest-free 5 year loan
Register directly through your bank for this scheme

UIF Temporary Employee/Employer Relief Scheme (TERS)

This is a special intervention by the Department of Labour (through the Unemployment Insurance Fund) to assist employees where the employer is struggling with payment of salaries.

This process is in force and working (the website is taking strain, patience is called for). You can either access the website here to process your application, or you can read the article here with step-by-step instructions on the process.

Summary
Fund ValueAimed AtRelief OfferedProcess
Businesses registered and compliant with UIFReplacement of lost income to
employees during temporary
closure of business and for employees in quarantine.
The salary benefits will be capped to a max amount of
R17 712 pm per employee and an
employee will be paid in terms of
the income replacement rate
sliding scale (38 % -60%) as
provided in the Ui Act
The employer to apply by
reporting their closure by
email to
Covid19ters@labour.gov.za,
an automatic response
outlining the application
process will be received.

Apply online at the UIF COVID-19 TERS Portal.

Contact
Covid19ters@labour.gov.za

Sukuma Relief Fund

This fund was made possible by the Rupert Family and Remgro, in association with Business Partners.

You can read the details of the fund on their website, but the fund is currently closed due to being over-subscribed.

You can add your details to their database and you will be contacted via email should more funding become available.

Summary
Fund ValueAimed AtRelief OfferedProcess
R 900 MillionAll– Loans between R250 000 – R1 000 000
– Month 1-12 – No interest, no payments
– Month 12-60 – Interest @ prime
Requirements:
– Feb 2019 AFS
– Fully CIPC, SARS, UIF Compliant

Excludes:
– Agriculture
– Nonprofit organisations
– Underground mining
– Lending

Check the application criteria here

SARS Initiatives

In order to assist businesses at this time, SARS has put in place various initiatives, all are aimed at getting money back to business sooner, or to delay payment to SARS where possible. We’ll touch on these below.

Early refunds

SARS is processing and paying out refunds earlier than usual, thereby putting funds back into businesses where it can have the best effect during this crisis.

Value Added Tax

SARS is also busy putting the (temporary) mechanism in place for VAT vendors to begin processing monthly filing rather than every two months, this allows the refund of the input tax to take place sooner and assist with cash-flow. They are trying to have this in place for May 2020.

Skills Development Levy

As of the 1st of May 2020, there will be a four-month holiday on the payment of the SDL. This will effectively put around R6 billion in the hands of businesses.

As with any Tax Authority around the world, the language can be very daunting to try and decipher. To help with this, SARS has a FAQ page for the Disaster Management Tax Relief and another one for EMPLOYERS ON COVID-19 TAX RELIEF.

There is a very concise description available on the Border Kei Chamber of Business Blog about the remedies available from SARS.


Debt Relief Finance Scheme

This fund is available to certain qualifying businesses registered with CIPC. The fund is administered by the Department of Small Business.

The scheme offers interest-bearing loans to qualifying entities for the funding of their business needs.

Summary
Fund ValueAimed AtRelief OfferedProcess
R 200 Million– Existing CIPC registered companies that can prove impact of COVID-19
– 100% Owned by South African citizens
– 70% of employees are SA Citizens
– Tax compliant with SARS
– UIF Compliant
– Loan funding at prime-5%
– Working Capital
– Purchase order funding
– Capital expenditure finance
1. Register on https://
smmesa.gov.za/
database.
2. Complete application form and
upload supporting
docs.

International Assistance

These are international aid programs that may currently, or might become open to the South African market.

Facebook – Small Business Grants Program

Facebook has developed a program to assist small businesses in the total amount (currently) of $100 million.

The assistance will be in the form of cash grants, or Facebook advertising credits.

The aim of the grants is;

  • to assist with workforce-related costs
  • to help pay rent
  • to cover operational costs
  • to help connect with more customers

Facebook aims to assist up to 30 000 businesses in over 30 countries where they operate.

To be eligible, you will need;

  • to have between 2 and 50 employees
  • to have been in business for over a year
  • to be able to demonstrate that COVID-19 has caused challenges to your business
  • to be in one of the areas where Facebook operates

I have attempted to sign up for this grant, but the package is not yet open in South Africa. We are one of the 30+ locations, but they are finalising the requirements. They do however allow any interested parties to add their name to the list. The more people that sign up, the more chance there is of the grant becoming available here soon.

Read more about the Facebook Small Business Grants Program here, you can also add your name to the list there.


In closing

We hope that this post has been of some value to you and allowed you to navigate the reams of information about the various funds and schemes available to Small Business owners at this time.

We will be updating this article as new info comes out.

If you feel that you have received valuable information by reading this, please consider sharing the article by hitting one of the share buttons below. Your share might be just what someone is looking for!


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