Coronavirus Support for South African SMEs: List of Government Funds

Are you struggling with the impact of COVID-19 on your SME?

You’re not alone.

South African SMEs will be hit hard by the 21-day lockdown needed to curb the country’s coronavirus outbreak.

In response, the government has announced an SME support package to keep businesses going during this difficult time.

Ebrahim Patel, the Minister of Trade, Industry, and Competition, said the government hoped to come through the lockdown with as “little damage” as possible.

“Across the world, more countries are now doing lockdowns and we want to ensure that it is managed in strong partnership with our people, with large and small businesses, with workers and with consumers.”

Different government departments are providing funding.

In this article, we’re covering the key funds you need to know about, including:

• Department of Small Business Development’s COVID-19 finance relief schemes
• Department of Tourism’s support for tourism businesses
• Department of Labour/Unemployment Insurance Funds support for employees

Department of Small Business Development’s coronavirus SME support

The Department of Small Business Development is leading the government’s SME support effort. It is working with the Small Enterprise Finance Agency (Sefa) and the Small Enterprise Development Agency (Seda).

Here’s an infographic outlining the different support you can access:

Business Growth and Resilience Facility

In this briefing, Khumbudzo Ntshavheni, the Minister of Small Business Development, discussed the government’s support for SMEs during the 21-day lockdown. (Ntshavheni’s address starts at 1:44’ mark.)

The Business Growth and Resilience Facility seeks to help manufacturing SMEs, with a focus on those who can provide high-demand products during the outbreak.

“(We want to give) Give local manufacturers and suppliers an opportunity to produce the medical and hygiene supplies to respond to the crisis,” said Ntshavheni.

Companies in the agri-processing sector will also be supported, added Ntshavheni.

The fund will provide working capital, bridging finance, equipment finance, and order finance, reports CNBC Africa.

Here’s the criteria:

• 100% SA owned
• Employ at least 70% South African staff
• SARS complaint

If SMEs are not registered and tax compliant, the department will help business owners with that process.

Priority will be given to women, youth, and people with disabilities.

Here is the process:

1. Register on https://smmesa.gov.za/
2. Complete application form
3. Attach supporting documents
4. Send to bizgrowth@sefa.org.za

SMME Debt Relief Scheme

If you’re struggling to keep up with your financial obligations, consider the SMME Relief Scheme.

This fund will provide loans so SMEs can buy raw materials, pay salaries, and cover operational costs.

Like the Business Growth and Resilience Facility, qualifying SMEs must be 100% South African-owned; 70% of the staff must be South African.

You can apply for both the SMME Relief Scheme and the Business Growth and Resilience Facility at https://smmesa.gov.za/

Here is the application process:

1. Register on https://smmesa.gov.za/
2. Complete application form
3. Gather supporting documents
4. Complete and send to smmerelief@sefa.org.za

Support for tourism businesses

Tourism businesses have taken a knock during the COVID-19 outbreak. Even before the shutdown, PwC predicted an R200m reduction in tourism spend.

To support these companies, the Department of Tourism has allocated R200 million to “cushion our society from economic difficulties”, according to this statement.

The qualifying criteria include:

• Turnover must not exceed R2.5m
• Must be trading for at least one year
• Should be able to show a link between COVID-19 and business distress

Financial support for employees

For companies battling to pay salaries during the lockdown period, staff will be eligible for government support.

The Unemployment Insurance Fund (UIF) has set up the Covid-19 Temporary Employer-Employee Relief Scheme (COVID-19 TERS).

“Caring and responsible employers that are unable to pay the full salaries of the workers they send home for their health and safety due to the lockdown are encouraged to apply for the Covid-19 TERS  Benefit from the UIF,” reads a statement a joint statement from the UIF and the Department of Labour.

Send an email to covid19ters@labour.gov.za to apply.

Here is a document on COVID-19 TERS from the Department of Labour, which explains:

• Background of the scheme
• Submission process
• Supporting documents required

Application guidelines for coronavirus assistance to South African SMEs

Here is a breakdown of the supporting documents you need to apply for government funding.