Did you know that various debt relief schemes have been established by government in order to support businesses as a result of the COVID-19 pandemic?
Over the last few weeks, it has become strikingly evident for many businesses that the COVID-19 pandemic, the national lockdown and the global recession have had an adverse economic effect on their ability to operate and possibly even survive, especially over the short term, and in particular while the crisis continues. Businesses are experiencing pressure in terms of cash flow and their ability to cover their costs, including paying their employees.
To assist businesses and the economy, various debt relief and financial assistance schemes have been established by government and private sector supporters. These measures are aimed primarily at assisting small and medium sized entities (“SME”). These measures are in addition to the tax and employment incentives extended by government, as discussed in our previous communications.
We have compiled a list of some of the most relevant debt relief and financial aid mechanisms established by government for which your business may be eligible to apply to for assistance:
Debt Relief Finance Scheme
This is an initiative established by the Department of Small Business Development. This fund aims to provide assistance to lessen the impact of the national lockdown and expected economic slowdown on SME’s.
This fund is geared to assist SME’s that are negatively affected, either directly or indirectly, as a result of the COVID-19 pandemic, for a period of six months. This assistance will be structured by way of a loan (with an interest rate of prime minus 5%) in order for these businesses to finance the payment of staff salaries, rates and taxes and working capital.
The total fund value available for assistance amounts to R500 million.
The criteria for SME’s to be eligible to apply for this funding are as follows:
In order to launch an application, please visit their website at http://www.smmesa.gov.za/.
The Industrial Development Corporation of South Africa (“IDC”)
The IDC has structured a range of financing and funding products that may be applied for by business struggling as a result of the COVID-19 pandemic and the national lockdown.
The IDC has R300 million available to assist businesses with funding their working capital. The Small Enterprise Finance Agency and the National Empowerment Fund also each have R200 million available for this purpose.
In order to determine if your business is eligible to seek assistance from the IDC and launch an application, please contact them at email@example.com or 0860 693 888.
Although this fund will not provide economic support to SME’s, it is interesting to take note of. This fund was established by donations by the Oppenheimer family and Naspers Ltd, amounting to a total of R1.65 billion, and is aimed at advancing the of prevention, detection, care and support of those whose lives has been disrupted by the COVID-19 pandemic.
For more information please visit the official website at https://www.solidarityfund.co.za/.
Look out for further communications from us which will provide more information regarding other debt relief and financing schemes available by members of the private sector, and which your business may be eligible to apply for.
Although we have used our best efforts to ensure that all information contained in this communication is accurate as at the date hereof, we cannot guarantee the accuracy thereof and recommend verification thereof before use.
This client information series is brought to you by the Siyandisa Trust in conjunction with PH Consult, a strategic partner of the Siyandisa Trust.
Type the code from the image