Financial Relief for Businesses – Covid-19

Sensitive to the plight of businesses across South Africa flowing from the Covid-19 lock down, the Law Society of South Africa has compiled a list of resources available for financial relief.

Assistance from the Debt Relief Finance Scheme

The Department of Small Business Development is offering assistance to small and medium enterprises (SME) meeting the following criteria:

  • The SME must have been registered with the Companies and Intellectual Property Commission (CIPC) no later than 28 February 2020.
  • The SME must be 100% owned by South African citizens.
  • At least 70% of the employees of the SME must be South African Nationals.
  • The SME should be fully tax compliant.

Applicants must demonstrate the direct or potential financial impact of Covid-19 on the SME in question. SME’s owned by women and/or youth, and SME’s employing people with disabilities will be prioritised.

Please find more information here.

Oppenheimer Fund (SA Future Trust)

The Oppenheimer family have set up a new trust, the SA Future Trust (SAFT), to disburse the family’s R 1 billion that it has pledged to assist employees of small businesses.

This fund is set to provide interest free loans to businesses over a five-year term. In order to qualify, businesses must meet the following criteria:

  • Annual turnover of less than R 25 million.
  • Have been trading for at least two years.
  • Must be in good standing with its bank, statutory creditors and the bureaus as at the end of February 2020.
  • Must be a sustainable business on 29 February 2020.
  • The company must be banking with one of the following banks: ABSA, FNB, Nedbank or Standard Bank.
  • Be able to prove that revenue has been impacted by Covid-19 and therefore requires assistance to pay their permanent staff salaries

The loans are exclusively for the purpose of paying the salaries of permanent employees. The loan has no minimum monthly payment requirements and only needs to be settled in full at the end of the term. Employees carry no liability for the repayment of the loan.

Applications for these loans are to be made through the business’ respective banks.

Unemployment Insurance Fund (Covid-19 TERS)

The Covid-19 TERS Fund is separate from the Unemployment Insurance Fund and is applicable to caring and responsible employers that are unable to pay salaries of workers they send home due to the lock down and are encouraged to apply for assistance. Only businesses that are closed due to the lock down may apply. If shorter hours are worked, UIF must be claimed.

Applications may be found on the UIF website.

South African Revenue Service (SARS)

SARS is offering the following relief:

  • Companies with a turnover less than R 50 million have the option to delay 20% of the company’s Pay As You Earn (PAYE) liability for a period up to four months, starting 1 April 2020 (please note this is not applicable for the March 2020 PAYE that has to have been paid by 7 April 2020). The PAYE liability that is delayed must be paid to SARS in equal instalments over six months starting 01 August 2020.
  • For provisional taxes there is also a delay that will be communicated when the time comes for provisional tax returns.