by John Henning

During the lockdown, all businesses and other entities shall cease operations, except for any business or entity involved in the manufacturing, supply, or provision of an essential good or service, save where operations are provided from outside of the Republic or can be provided remotely by a person from their normal place of residence. 

If employees are working from home the business can go on functioning. 

The original lockdown was from 24h00 on 26 March 2020 to 24h00 on the 16 April 2020. The extended lockdown is from 24h00 on the 16 April 2020 to 24h00 on the 30 April 2020. 

Effectively 23 workdays will be affected. 

Measures made available 

There is a range of measures available to help South African businesses and individuals amid a crippling corona-induced economic crisis. Government, banks, and insurers all have interventions to help cushion the economic blow of Covid-19. 

Most of the support is aimed at small businesses, and their employees. 

From loans to tax breaks, most interventions are aimed at getting small businesses in particular through the next couple of months. More measures are expected to help individuals, the self-employed and the informal sector. 

On Thursday, when President Cyril Ramaphosa announced a two-week extension to the national lockdown, he also promised that a new package of urgent economic measures is coming – as well as more support to protect poor and vulnerable households. 

Small Business Development 

Entities can register at www.smmesa.gov.za and will be asked to provide basic details and indicate whether they will require financial or non-financial assistance or both. 

Businesses within the critical sectors as stated, manufacturers, distributors, necessities, food, etc, are expected to receive priority support during the lockdown period. 

Small and medium-sized businesses 

Government funding 

There are two main government schemes aimed at small businesses. 

a. The Debt Relief Finance Scheme will assist distressed small companies with funding. 

Debt relief benefitting SMES Businesses which are negatively affected, directly or indirectly, due to the Coronavirus pandemic. 

Application Process 

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

Qualifying Criteria 

  • The business must have been registered with CIPC by at least 28 February 2020.
  • Company must be 100% owned by South African Citizens.
  • Employees must be 70% South Africans.
  • Priority will be given to businesses owned by Women, Youth and People with disabilities.
  • Be registered and compliant with SARS and UIF.
  • Seda will assist micro-enterprises to comply and request for assistance must be emailed to debtrelief@seda.org.za.
  • Whereas small and medium enterprises must ensure own compliance.
  • Registration on the National SMME Database – https://smmesa.gov.za
  • Proof that the business is negatively affected by COVID-19 pandemic.
  • Complete the simplified online application platform.
  • Company Statutory Documents.
  • FICA documents (e.g. Municipal accounts, letter from traditional authority);
  • Certified ID Copies of Directors.
  • 3 months of Bank Statements.
  • Latest Annual Financial Statements or Latest Management Accounts not older than three months from date of application – where applicable.
  • Business Profile.
  • 6 months Cash Flow Projections – where applicable.
  • Copy of Lease Agreement or Proof ownership if applying for rental relief.
  • If applying for payroll relief, details of employees – as registered with UIF and including banking details – will be required as payroll payments will be made directly to employees.
  • SMME employers who are not compliant with UIF must register before applying for relief.
  • Facility Statements of Other Funders.
  • Detail breakdown on application of funds including salaries, rent etc. 

info@dsbd.gov.za info@mybindu.org.za 0860 663 7867 or 0860 ONE 

The Business Growth/Resilience Facility aimed at small companies which can take advantage of supply opportunities resulting from the coronavirus pandemic or a shortage of goods in the local market. 

Business Growth / Resilience Facilities Benefitting SMMEs

Businesses geared to take advantage of supply opportunities resulting from the Coronavirus pandemic or shortage of goods in the local market. 

Application Process 

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

Qualifying Criteria 

  • The business must have been registered with CIPC by at least 28 February 2020.
  • Company must be 100% owned by South African Citizens.
  • Employees must be 70% South Africans. 
  • Priority will be given to businesses owned by Women, Youth and People with Disabilities.
  • Be registered and compliant with SARS and UIF.
  • For non-compliant Micro businesses, Seda will assist them to comply and request for assistance must be sent to: growthfund@seda.org.za.
  • Registration on the National SMME Database: https://smmesa.gov.za/
  • Complete the simplified online application form available from www.dsbd.gov.za; www.sefa.org.za: https://seda.org.za
  • CIPC Registration Documents.
  • FICA documents (e.g. Municipal accounts, letter from traditional authority);
  • ID Copies of Directors/members.
  • 3 months Bank Statements.
  • Latest Annual Financial Statements or Management Accounts not older than three months from date of application.
  • Business Profile.
  • 6 months Cash Flow Projections – where applicable.
  • Relevant Industry Certification – where applicable.
  • Estimations for funding requested. 

info@dsbd.gov.za info@mybindu.org.za 0860 663 7867 or 0860 ONE 

For both, companies first need to register at https://smmesa.gov.za/. Further details to apply for both schemes will be released on Thursday. (Money will be paid out within seven business days after an application has been approved, the department of small business development promised.) 

Word of caution 

With the increased demand for these goods, and with the VAT exemption on importation, business owners may be tempted to diversify their trade and capitalize. “However, it is important to note that the importation of goods under this item in Schedule 1 is not unconditional,” the legal expert said. 

Businesses who wish to import these goods must obtain a certificate from the International Trade Administration Commission and may be subject to any further conditions agreed to by the Governments of the South Africa, Botswana, Lesotho and Swaziland. 

Naturally, relief measures must be implemented with haste, which means there may be some practical hurdles for taxpayers, especially in complying with any formalities. 

Whilst it is very difficult to avoid these issues, where there are hindrances in obtaining certificates for example, the impact of the relief is somewhat compromised. 

Work in progress 

Governments around the globe are traversing unchartered waters at an extremely high pace, which simply means that no one has the wisdom on the best way to survive the crisis from a fiscal perspective, said du Toit. 

“The South African government appears to be paying attention when the private sector weighs in, which is an encouraging sign, as it continuously develops fiscal relief.” 

For example, the relief package was expanded between the time the initial explanatory notes were published (29 March) to when National Treasury published the draft bills on 1 April. 

The Organisation for Economic Co-operation and Development (OECD) provides another perspective by compiling the various relief measures imposed by countries across the globe. 

“The South African context is undoubtedly a unique one, but this is an invaluable contribution by the OECD that the government must utilize. Overall, government must be commended for the swift action it has taken in these times, even though we may encounter several kinks along the way,” said du Toit. 

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