Business Relief - COVID-19

Various lifelines of support are available due to the COVID-19 pandemic. Find all the current available information below.

Private Funding & General

Overview

The South African Future Trust (SAFT), established by Nicky and Jonathan Oppenheimer will extend financial support up to 1 billion to SMME employees affected by the COVID-19 pandemic.

SAFT will transfer funds directly to employees of participating SMMEs, via interest-free loans where employees themselves carry no liability.

The aim is to enable SMMEs to significantly reduce their cash outgoings and continue operations during this time of crisis, while retaining their employees – affording these companies much-needed breathing room to make long-term decisions.

Eligibility

  • Must have been adversely affected by COVID-19
  • Turnover less than R25m
  • Trading for at least 24 months
  • Sustainable as at 28 February 2020 – Prior to Pandemic
  • Must be customer of Partner Banks – Standard Bank, FNB, ABSA, Nedbank

Relief Details

  • Funds are disbursed directly to Employees via the fund from partner banks
  • Estimated at R750/week per eligible employee
  • Interest free subordinated loan to employer to be repaid within 5 years

Required Documentation

  • Company registration number.
  • A valid PAYE registration number registered with SARS.
  • A valid income tax number registered with SARS.
  • Confirmation of permanent employment status of the employee.

More information and specific application information can be obtained directly at the Trust Website

The Sukuma Relief Programme, established by the Rupert Family, will disburse up to 1 Billion Rand in funding to SMME’s affected by the pandemic.

The Sukuma Relief Programme offers distinct and separate financial aid to formal sole proprietors and close corporations, companies, and trusts.

Close Corporations, Companies and Trusts

Overview

For close corporations, companies, and trusts, financial aid in the form of an unsecured interest-bearing loan of between R250, 000 and R1 million coupled with a non-repayable grant of R25, 000 per qualifying business is on offer. The loan portion will be interest-free for 12 months with no repayment obligations during this period.

The loan is repayable after 12 months, and incurs interest at the prime rate from month 13, once the business is on its feet. The money can be used to cover payroll, rental, and other monthly operating overheads. There is no security requirement for the loan.

Eligibility

  • Be formally registered
  • Provide evidence of viability prior to COVID-19 outbreak
  • Be both tax and regulatory compliant

Application Procedure

Feedback is expected within 7 days of applying. The application is fully online and can be accessed, together with additional information directly on the Sukuma website.

Formal Sole Proprietors

Overview

For formal sole proprietors, we offer a grant of R25, 000 per qualifying business to be used to pay for overheads.

Eligibility

  • Provide evidence of viability prior to COVID-19 outbreak
  • Be both tax and regulatory compliant

Application Procedure

Feedback is expected within 7 days of applying. The application is fully online and can be accessed, together with additional information directly on the Sukuma website.

Most major banks have advanced formal requirements for payment relief on existing payment obligations.  We have assisted clients successfully with these applications.

Eligibility requirements are specific per bank and per application and depend on the bank in question.

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SA Gov

Government Funding & CIPC

Overview

The Department of Small Business Development has made R500m available for funding to SME’s in the form of 2 separate funds.  This is a combined effort of the Department of Small Business Development, Small Enterprise Finance Agency,

  • SMME Business Growth/Resilience Facility
  • SMME Debt Relief Finance Scheme

SMME Debt Relief Finance Scheme

This funds the entity for Salaries, Rent and Municipal Accounts.  The funding is dependent on the business needs and Salaries will be funded inline with the UIF Scale.

Eligibility Requirements

  • Must have been adversely affected by COVID-19
  • The business must have been registered with CIPC by at least 28 February 2020
  • Company must be 100% owned by South African Citizens
    • Employees must be 70% South Africans and Priority will be given to businesses owned by Women, Youth and People with Disabilities
  • Be registered and compliant with SARS and UIF

Application Procedure

  • Registration on the National SMME Database – https://smmesa.gov.za
  • Upload of Required documents during application
  • Completion and submission of the attached form
  • More information on the Relief Programme can be obtained directly from the DSBD.

SMME Business growth Facility

This funds businesses geared to take advantage of supply opportunities resulting from the Coronavirus pandemic or shortages of goods in the local market. The funds will only fund Stock, Bridging Finance, Purchase Order, Business equipment up to a maximum of R5m.

Eligibility Requirements

  • The business must have been registered with CIPC by at least 28 February 2020
  • Company must be 100% owned by South African Citizens
    • Employees must be 70% South Africans and Priority will be given to businesses owned by Women, Youth and People with Disabilities
  • Be registered and compliant with SARS and UIF

Application Procedure

  • Registration on the National SMME Database – https://smmesa.gov.za
  • Upload of Required documents during application
  • Completion and submission of the attached form
  • More information on the Relief Programme can be obtained directly from the DSBD.

Overview

The Department of Tourism has made available R200m in funding to businesses in the Tourism and Hospitality sector that have been affected by the COVID-19 Pandemic.

The fund will be administered to benefit SMMEs in all the 9 provinces and various tourism sub-sectors.

Eligibility

  • Must be a formally registered business with Companies and Intellectual Property Commission (CIPC).
  • Turnover must not exceed R2.5 million per year.
  • Must have a valid tax clearance certificate.
  • Guaranteed employment for a minimum number of staff for a period of 3 months.
  • Proof of minimum wage compliance.
  • Must provide proof of UIF registration for employees employed by the business.
  • Be an existing tourism-specific establishment as outline in the scope of application (suppliers and intermediaries are not eligible).
  • Must be in existence for at least one business financial year.
  • Prove that the relief is required as a result of the impact of COVID-19.
  • Must submit statements of financial position; over 12 months’ bank statement, balance sheet, income statements, cash flow statements.
  • Indicate the intended use of the resources.

Delivery Mechanisms

  • The relief will be distributed in a spatially equitable manner to ensure that all provinces benefit.
  • At least 70% of beneficiaries will be businesses that are Black owned.
  • At least 50% of beneficiaries will be businesses that are women owned.
  • At least 30% of beneficiaries will be businesses that are youth owned.
  • At least 4% of beneficiaries will be businesses that are owned by people with disabilities.

Application procedure

Currently no formal information has been released but the Minister did mention that Tourism Services Call Centre will be used to provide information on the relief measures.  This call centre can be reached on 0860-TOURISM or +27 (0) 860 868 747 or emailed on callcentre@tourism.gov.za

Overview

R200 million has been set aside under the COVID-19 Black Business Fund as a blended facility for SMEs that manufacture and supply Identified Priority Products to access concessionary loan funding.

Funding

  • Limited to R10 million per applicant for working capital, machinery and equipment
  • Up to 12 months payment moratorium at 0% fixed interest rate
  • After 12 months a fixed interest rate of 2,5% will apply
  • Maximum term is 60 months, including moratorium, and
  • First drawdown must occur within 1 month from approval date

Eligibility

  • Formally registered Company, Close Corporation or Co-Operative
  • Tax Compliant
  • Be a current and registered supplier with retailers and other institutions in good standing or have a purchase order/ contract/ letter of intent
  • Require working capital or funds to purchase machinery and equipment
  • The fund WILL NOT service any pre-existing debt or help settle monies owed
  • 50%+ Black Ownership and Control with preference for Black Women
  • Minimum requirement of R500k in Working Capital, Machinery and equipment
  • Must result in a retention of creation of jobs

Priority Products

  • Disposable plastic gloves and face masks.
  • Dispensers (water sanitisers and soap).
  • PCR test kits for Coronavirus.
  • Protective respirators.
  • Disinfectants and alcohol-bases wipes.
  • Toilet paper.
  • Medical protective clothing.
  • Steel beds for hospitals and clinics.
  • Hospital linen and clothing.
  • Mattresses and/or sponge.
  • Protective goggles, hoods and face shields.
  • Hand sanitisers and soap.
  • Detergents/cleaning products.
  • Disposable aprons and cups.
  • A range of food products as listed

Required Documentation

  • NEF form.
  • Declaration on BEE status and size of the business.
  • Summary of production in the last 3 months.
  • Historical financial statements (up to 3 years, if available).
  • Signed copy of a purchase order, contract or letter of intent.
  • Financial forecast for the duration of the contract.
  • Additional information that would enhance the application may be requested by the NEF

More information can be obtained on the National Empowerment Fund page.

Overview

Only Businesses providing Essential Services as defined are allowed to trade during the lockdown period.    A formal list of essential services is provided by government.

Application

If your qualifies as an essential service you need to apply for a certificate to trade during the lockdown period.  You can do so through BizPortal.

A submission of incorrect information is a criminal offence and can lead to prosecution.  We suggest that you ensure you meet the definition of the service you intend applying under.

Tax and UIF Relief

SARS

Overview

In order to minimise the loss of jobs during this critical period, Government proposes expanding the ETI programme for a limited period of four months, beginning 1 April 2020 and ending on 31 July 2020.

Relief

  • Increasing the maximum amount of ETI claimable during this four month period for employees eligible under the current ETI Act from R1 000 to R1 500 in the first qualifying twelve months and from R500 to R1 000 in the second twelve qualifying months.
  • Allowing a monthly ETI claim in the amount of R500 during this four month
    period for employees from the ages of:
    • 18 to 29 who are no longer eligible for the ETI as the employer has
      claimed ETI in respect of those employees for 24 months; and
    • 30 to 65 who are not eligible for the ETI due to their age.
  • Accelerating the payment of employment tax incentive reimbursements from twice a year to monthly as a means of getting cash into the hands of tax compliant employers as soon as possible.

Eligibility

  • Registered Employer with SARS as at 1 March 2020
  • Must be tax compliant

Overview

In order to assist with alleviating any cash flow burden arising as a result of the COVID-19 outbreak, Government proposes the following tax measures for tax compliant small to medium sized businesses, for a limited period of four months, beginning 1 April 2020 and ending on 31 July 2020.

Relief

  • Deferral of up to 20% of of PAYE liability without the imposition of penalties.
  • Repayment of the deferred amounts in equal instalments over 6 months commencing 1 August 2020 (Payment due 7 September 2020).

Eligibility

  • Must be small business – Turnover less than R50m.
  • Must be tax compliant

Overview

In order to assist with alleviating any cash flow burden arising as a result of the COVID-19 outbreak, Government has allowed the deferral of provisional tax payments for the coming twelve months commencing 1 April 2020.

Relief

  • Deferral of a portion of the payment of the first and second provisional tax liability to SARS, without SARS imposing administrative penalties and interest for the late payment of the deferred amount
  • The first provisional tax payment due from 1 April 2020 to 30 September 2020 will be based on 15 percent of the estimated total tax liability, while the second provisional tax payment from 1 April 2020 to 31 March 2021 will be based on 65 percent of the estimated total tax liability.
  • Provisional taxpayers with deferred payments will be required to pay the full tax liability when making the third provisional tax payment in order to avoid interest charges.

Eligibility

  • Must be small business – Turnover less than R50m (Legal Entity). Sole Proprietor less than R5m Turnover.
  • Cannot earn more than 10% of Turnover from Interest, Dividends, Foreign Dividends, Rental and remuneration
  • Must be tax compliant

Currently no formal deferral of Value Added Tax has been announced.  An automatic penalty will be applied (10%) should there be a late payment.

It is also worth noting that relief may be available in terms of the Tax Administration Act as payments are delayed due to:

  • Circumstances beyond the control of the taxpayer (at the direction of a senior SARS official) such as
    • a natural or human-made disaster

COVID-19 is classified as a natural disaster in terms of S27 of the Disaster Management Act.  Penalties will need to be objected against through the formal process should this be the case.

It is also worth noting that should this not be paid that the business will be non-compliant and will not be able to take advantage of other tax relief due to this.

Additional relief if granted by SARS on the importation of essential goods in terms of Customs Duty and Importation VAT.

More information can be obtained on the SARS COVID-19 Portal.

Overview

The Unemployment Insurance Fund will assist affected workers through existing benefits including Illness, Reduced Work Time, Unemployment and Temporary Employer/Employee Relief Scheme (TERS) benefits.

The benefits are paid in terms of of the income replacement scale of between of between 38%-60% up to the maximum R17 712 with a minimum amount equivalent to the minimum wage.

Benefits are available for:

  • Ill employees as a result of COVID-19
  • Employees temporarily layed off / on reduced work time
  • Death benefit due to COVID 19

Eligibility

  • Formally registered with UIF
  • Complies with the Application Procedure
  • Closure must be directly linked to COVID-19 Pandemic

Application Procedure

An email should be sent to covid19ters@labour.gov.za with the following documentation or online via the UFiling system.

  • Letter of Authority to Applicatn
  • If more than 10 staff – MOA (completion of the agreement between UIF, Bargaining Council  and Employer)
  • Employee details in required format
  • Last 3 months payroll details (proof)
  • Confirmation of bank details in prescribed format

More information can be obtained directly from the Easy Aid Benefit document.

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