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Helping SMEs Recover: A Round-Up of SA Funding Options and Resources

Helping SMEs Recover: A Round-Up of SA Funding Options and Resources
June 10, 2020 gnuworld
funding for small businesses

The COVID-19 pandemic and subsequent lockdown have had devastating effects on many SMEs in South Africa.

Small businesses that had to close for a few weeks or limit their services may be struggling to cover their basic expenses, including salaries.

If your business is struggling, it’s not too late to investigate assistance in the form of government or private funding.

Solidarity Fund

The Solidarity Fund was created on 23 March 2020 in response to the COVID-19 pandemic.

It has received multiple large donations from companies and individuals to help fund various much-needed initiatives. Many of the funding schemes and relief efforts below have been made possible by the fund.

Governmental SMME Funding

The Department of Small Business Development has a few funding options for small businesses that have been negatively affected by the pandemic.

These include a debt relief finance scheme and a business growth/resilience scheme. You can find the application form for both here.

South Africa Future Trust

The South Africa Future Trust (SAFT) offers direct financial support to employees of SMMEs that are in danger of losing their income because of the COVID-19 pandemic.

The SMMEs apply for the interest-free loans on their employees’ behalf so the at-risk employees carry no liability.

Industry-specific SMME funding and relief

There are a few industry-specific relief funds available as well.

The South African National Taxi Council (SANTACO) have a R3.5-billion COVID-19 relief fund aimed at supporting queue marshals, rank managers, taxi drivers and the association’s support staff.

There is also a Youth Business Relief fund to assist young people in business with operational and labour costs, rental and more as well as a COVID-19  Tourism Relief Fund from the Department of Tourism.

COVID-19 Loan Guarantee Scheme

Government’s COVID-19 Loan Guarantee Scheme was announced on 12 April 2020 and will provide an additional R200-billion in relief funding to businesses with a turnover under R300-million annually.

The scheme will provide government-guaranteed loans via six participating banks; Absa, First National Bank, Investec, Mercantile Bank, Nedbank and Standard Bank.

National Empowerment Fund COVID-19 Business Funding

The National Empowerment Fund is offering funding to black-owned SMEs with a 12-month repayment moratorium with 0% interest for the first year.

R200-million has been set aside and applicants can receive up to R10-million each for working capital, machinery and equipment.

IDC COVID-19 Essential Supplies Intervention

The Industrial Development Corporation is offering funding to businesses that manufacture or can acquire the capacity to manufacture products needed to treat, curtail or combat the spread of COVID-19.

Financially distressed companies in these sectors can apply for short-term low-interest loans, revolving credit facilities and bank guarantees.

UIF Subsidy

The Unemployment Insurance Fund (UIF) has allocated billions of Rands to the COVID-19 Temporary Employer/Employee Relief Fund (TERS) and has already paid out over R9-billion.

Employers can apply to the relief fund for benefits in order to pay their employee’s salaries and wages during the pandemic.

Tax relief

There are a number of tax relief measures as well to ease the financial burden of the crisis on small businesses.

These include fast-tracking VAT refunds, deferral of provisional tax liabilities and increases to tax incentive amounts, amongst many others.

Other relief measures

Most banks, credit providers and insurance companies are introducing measures to assist their clients with payments, fees and premiums.

Check with your service providers if there are any measures in place that might help your SME with business expenses.

Supporting small businesses at The Workspace

At The Workspace, we can’t offer grants or relief funding – but we are doing everything we can to help.

We are taking all necessary safety measures to mitigate the spread of the virus so businesses can get back to normal operations as soon as possible.

We’re also currently offering a special designed to help businesses and entrepreneurs bounce back.

Sign up for a serviced office for six months and get the first month free – plus 10% off your rental for the second and third months.

If you have questions about renting office or coworking space during any lockdown level, please contact us on 0861 250 259.

Contact us to find out more

Spring Special: Get 1 month free on office space and 50% off your second month OR try our coworking free for 1 week! Contact us to find out more. T&Cs apply.