Coronavirus SME relief: Your Business Funding and Support Options (Full Guide)

The government and private sector have launched interventions to support your business during the coronavirus outbreak.

On 22 April, President Cyril Ramaphosa announced a set of new coronavirus relief measures. These include an R2bn support package for SMEs and spaza shop owners, an R200 billion loan scheme with banks, and expanded tax relief.

The situation is evolving fast. Please check our FAQ for breaking updates on coronavirus SME support.

Here is our guide on all the coronavirus funding options available to your SME. You’ll learn more about each fund, eligibility, application process, and criteria.

In this post, we summarise the relief available to your SMME, plus additional resources.

Jump to the section for more detail:

• UIF payments
• Deferred tax payments
• Government funds
• Private funds

Get UIF benefits

SMEs can apply for the Unemployment Insurance Fund’s COVID-TERS  benefit to cover salaries.

Type of support:

• Employees are paid between 38% to 60% of their salaries on a sliding scale.
• The lower the salary the higher the COVID-19 benefit.
• Companies apply on behalf of employees.

Defer your tax payments

Another way to increase cash flow is to defer your provisional and PAYE payments.

Provisional tax

Type of support:

1. You can pay 15% of your total estimated taxable income for the tax year for your first payment. This is due from 1 April 2020 to 30 September 2020.
2. You can pay 15%  of your tax payment for the second provisional tax payment. This is due between 1 April 2020 and 31 March 2021.

PAYE

Type of support:

• SMEs can defer 35% of their PAYE liability, starting with the payment due on 7 May 2020 and ending with the amount due on 7 August 2020.
• SMEs will need to pay the deferred tax liability to SARS in equal instalments over six months. The first payment must be made on 7 September 2020

Government funds

A range of government departments has introduced coronavirus funds.

Department of Small Business Development

The Department has two funds: the SMME Relief Scheme and the Business Growth Facility.

Debt/SMME Relief Scheme

The Department of Small Business Development’s SMME Relief Scheme aims to help businesses cover expenses during the outbreak.

Type of support:

• Soft-loan facility for six months
• You apply for funds to pay salaries, rent, buy raw materials or municipal accounts
• It opened in April 2020

Business Growth/Resilience Facility

Type of support:

• The facility covers funds for working capital, stock, bridging finance, purchase order finance, and capital equipment finance.
• The interest rate is at prime less % pa.
• Terms will depend on SME cash flow.

Department of Tourism

The Department of Tourism has allocated R200 million to its COVID-19 Tourism Relief Fund.

Type of support:

• The COVID-19 Tourism Relief Fund is once-off grant funding, capped at R50,000 per entity.
• Funding can be used for fixed costs, operational costs, and supplies.
• This fund is open from 7 April to 30 May.

Department of Agriculture

The Department of Agriculture has established an Agriculture Disaster Support Fund for smallholder farmers.

Type of support:

• Grant funding capped at R50,000 per farming operation
• Funding can be used to complete the current production cycle
• This fund is open until 22 April.

Private funds

The Rupert and Oppenheimer families have each donated R1 billion rand to help South African SMEs. Because the Rupert fund is no longer accepting applications, we will focus on the Oppenheimer fund, the South Africa Future Trust.

Eligibility:

Here’s an overview of the criteria:

• SMEs must be existing clients of the fund’s partner banks: Absa, Nedbank, FNB, Standard Bank, and Mercantile Bank.
• Annual turnover must be below R25 million per year
• SMEs must be trading for at least two years
• Should demonstrate a link between business distress and COVID-19

For more information, please visit the SAFT website

Additional resources on coronavirus funding and support for SMEs

• Lulalend’s FAQ page (updated with breaking news on business funding support)
• Find out if a payment holiday is right for your SME
• Join a virtual community of South African SMEs in our Facebook group, SA Small Business Unlocked