Covid-19 mitigation measures for SA SMMEs

A snapshot of selected government interventions to support SMMEs during the Covid-19 pandemic 

South African SMMEs impacted by the 21 day lockdown – and the accompanying drastic decline in their business during the period and immediately beyond the end of the lockdown – can explore a number of government initiatives designed to ameliorate the impact of the lockdown.

This EDSE Programme Policy Brief points SMMEs to some of these resources and how to apply for available support measures. It will be updated as new programmes or new guidelines are published by government agencies.

  • The Department of Small Business Development

The Department of Small Business Development, as the national government agency mandated with supporting the South Africa’s small business sector, has developed two important interventions to support SMMEs in this difficult period.  They are the SMME Debt Relief Finance Scheme and the SMME Business Growth Resilience Facility.

SMMEs wishing to apply for financial assistance from either of these facilities need to show a link between the outbreak of  Covid-19, and measures to reduce its impact across South African society, and the subsequent loss of income to individual businesses. Applications can be lodged from Thursday (2 April) on the national SMME database

Scope of the two schemes:

  • The SMME Debt Relief Finance Scheme is designed for SMMEs which are negatively affected, directly or indirectly, due to the pandemic.
  • The SMME Business Growth Resilience Facility is designed to mitigate against job losses and the expected harsh economic impact due to the pandemic.

Applicants for either of the above schemes need to meet the following core qualifying criteria:  

  • The business must have registered with the CIPC by the 28 February 2020 and be registered and compliant with both SARS and the UIF
  • The company must be 100% owned by South African citizens
  • 70% of employees must be South African citizens
  • Priority will be given to businesses owned by women, youth and people with disabilities.

Applicants need to submit a number of documents in support of their application:

  • If applicants are applying for rental relief: a copy of lease agreement or proof of ownership
  • If applicants are applying for payroll relief: details of employees – as registered with UIF and including banking details – will be required as payroll payments will be made directly to employees
  • Company statutory documents and business profile, including certified copies of the identity documents of directors;
  • FICA documents (e.g. municipal accounts, letter from traditional authority);
  • Supporting financial documents:  Bank statements for the last three months, the latest annual financial statements, or the latest set of management accounts not older than three months from date of application.
  • Six monthly cash flow projections – where applicable.

Micro-enterprises wishing to apply will be assisted by seda staff.  Requests for assistance can be emailed to  Small and medium enterprises must undertake their own application and ensure their compliance with the criteria. Further details can be obtained from here and here.

  • The Small Enterprise Finance Agency

The Department of Trade, Industry and Competition (DTIC) has made R200m available to sefa to support businesses falling within its mandate to prioritise products required to curtail the impact of the virus. The DTIC has also provided funding to the National Empowerment Fund and the Industrial Development Corporation to support firms falling within their mandates.  Further details can be obtained here.

  •  The Department of Trade, Industry and Competition

SMMEs who believe that they provide essential goods and services must register on the online Bizportal.  Only companies permitted in terms of the lockdown regulations will be allowed to continue operating through the period. Possession of a CIPC certificate does not constitute permission to operate during the lockdown. Companies must be guided by the regulation as to whether their business operations constitute essential services. Any misrepresentation of information is a criminal offence and will be prosecuted.  The Bizportal can be accessed here.

  • National Treasury

An estimated 75 000 small and medium term enterprises stand to benefit from the “exceptional tax measures” announced over the weekend by the Minister of Finance. Tax compliant businesses with a turnover of R50m or less will be allowed to delay 20% of their employees’ tax liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months. These measures will take effect from 1 April 2020.  Further details can be obtained here.

  • The Department of Tourism

The Department has made R200m available to assist SMMEs in the tourism and hospitality sector who are under particular stress due to the new travel restrictions. The fund will be administered to benefit SMMEs across all nine provinces and across various tourism sub-sectors. The Department says there will be a degree of bias towards tourism operators in rural areas, townships, women, young people and people with disabilities. Further details on the categories, the qualifying criteria and the delivery mechanism for assistance can be obtained here.

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