Do you qualify for the COVID-19 SMME funding relief?

The following SMME emergency funding packages are being made available to small, medium and micro-businesses.

While one cannot know what tomorrow holds, one can still prepare as best for whatever it delivers. We know that during this lock down as entrepreneurs and business owners you will not stop thinking about your businesses and how best to ensure that they survive and thrive post COVID-19.
The following SMME emergency funding packages are being made available to Small, Medium and Micro-Businesses.

Business growth strategy

This is a long-term relief option for entities that produce/supply health care and related products that will be utilised to combat the spread of COVID-19, as well as the local production/supply of essential goods that will be required by the country from a shortage due to the COVID-19 pandemic.
A working capital facility will be provided based on the needs of the business at an interest rate of prime less 5%.

Requirements

• Businesses geared to take advantage of supply opportunities resulting from the Coronavirus pandemic or shortage of essential goods in the local market;
• 100% owned by South African citizens;
• 70% of employees must be South African;
• SARS registered and tax COMPLIANT;
• UIF compliant; and
• Registered on the National SMME database (www.smmesa.gov.za).

How to register

• Complete the online application form (www.smmesa.gov.za)
• Submit the documents listed below to info@sefa.org.za
• Company statutory documents
• FICA documents
• Certified identity documents of directors/members
• 6 months bank statements
• Latest AFS / management accounts not older than 3 months
• Business profile
• Project execution plan
• 12 months cash flow projections
• Proof of ownership / lease agreement
• Industry certification (where applicable)
• Copy of contract or purchase order in respect of the goods
• Facility statement of other funders (where applicable)
• Quotations for funding

SMME relief finance

This funding option is to assist small and medium businesses continue with its operations and retain jobs by providing working capital and other assistance.

Businesses may apply for financial or non-financial assistance in order to meet employee, supplier and overhead obligations. This is a soft loan package over a 6-month term from April 2020. The facility is for working capital only provided at an interest rate of prime less 5%, however limited to R 500 000 per SMME subject to certain requirements.

The estimated turnaround time on applications is 14 days. An audit will be conducted on successful applicants and any entity that fails such audit will be required to repay the facility at prime plus 10%.

Requirements:

• The business must be classified as either a small, micro or medium enterprise (as per schedule 1 of The National Small Enterprise Act)
• The business must have been affected by the COVID-19 pandemic
• The business must have been registered with CIPC by at least 28 February 2020
• 100% owned by South African citizens
• 70% of employees must be South African
• SARS registered and tax COMPLIANT
• UIF compliant
• Registered on the National SMME database (www.smmesa.gov.za)

How to register

• Complete the online application form (www.smmesa.gov.za)
• Submit the below documents to info@sefa.org.za
• Proof that the business has been negatively affected by COVID-19 pandemic
• Company statutory documents
• FICA documents
• Certified identity documents of directors/members
• 6 months bank statements
• Latest AFS / management accounts not older than 3 months
• Business profile
• 12 months cash flow projections (where applicable)
• Proof of ownership / lease agreement
• Facility statement of other funders (where applicable)
• Detailed breakdown on application of funds including salaries, rent, etc

Application process

• Register on https://smmesa.gov.za/
• Complete online Application Form (to be released on Thursday, 02 April 2020)
• Upload Required Supporting Documents

Restructuring of SEFA-funded SMMEs

A payment moratorium/holiday is being granted to SEFA funded SMMEs that are negatively impacted by COVID-19 pandemic.

This payment moratorium is limited to the following industries:

• Retail, wholesale and tourism industry
• Production industry
• Agriculture industry
• Construction industry
• Mining industry

The maximum term of the facility is 6 months (dependant on the lockdown period) at an interest rate of prime less 5%. The facility is based on the cash flow position of the business and attempts to match the cash flow pattern with the funding provided.

An audit will be conducted on successful applicants and any entity that fails such audit will be required to repay the facility at penalty interest rates.

Based on the information currently on hand it is apparent that an employer cannot apply for debt relief under the SMME relief finance fund, nor claim a benefit from the COVID-19 TERS through the Department of Labour.

The COVID-19 TERS benefit is based on salary payment scales and is capped at R 17 712.00 per month, per employee. This benefit however provides a safety net ensuring your employees receive some form of compensation, albeit the time delay in receipt of the benefit.

You may request funding for your salary commitment from the relief fund, however cognisance should be taken to the fact that the relief fund is a loan facility which will have to be repaid.

If you are interested in pursuing any of these further, please contact your PKF representative or PKF member firm.