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Support programmes available to small businesses during COVID-19 lockdown

As an SME, you’re dealing with unprecedented challenges as a result of the Covid-19 lockdown. The good news is that there is assistance and funding available to you. 

Small and mid-sized businesses will be amongst the most affected by Covid-19. While we can’t foresee all of the long-term effects of the global pandemic, short-term SME survival is geared at cash flow and working capital, and multiple government departments and funders have put solutions together to support South African-owned SMEs through this period. 

Governmental support 

  • More than R3 billion in industrial funding has been set aside by the IDC and the Department of Trade, Industry and Competition for: 

    • Vulnerable firms 

    • To fast-track financing for businesses that are critical to South Africa’s efforts to fight Covid-19 and its economic impact. 

  • Additional funding has been allocated for importing essential medical products, agriculture and food chain security, working capital for the tourism sector, bridging finance for supply chain interruptions and car component manufacturers who support car makers. 

  • The IDC can be contacted through [email protected] and 0860 693 888. Visit https://www.idc.co.za/2020/03/24/idc-interventions-in-response-to-covid-19/ to determine if you are a qualifying business. 

Top tip: Events are rapidly unfolding, and as much as government wants to support SME’s, funding processes are complex. Therefore, expect delays and factor this into your planning as much as possible.   

Tax relief 

  • Temporary Employee Relief Scheme (TERS): Businesses can apply for UIF on behalf of their employees. The maximum TERS allowance payable for each employee is R17 242 per month. 

  • Employment Tax Incentive (ETI) reimbursements: Companies will be able to claim R1 500 per month for every worker who earns less than R6 500 and is younger than 30 years and R500 for all workers up to the age of 65 who earn less than R6 500 a month.  

  • Tax reimbursements: Monthly (instead of bi-annual) employment tax incentive reimbursements from SARS to compliant employers. 

  • Delayed PAYE payments: Tax compliant businesses with a turnover of R50 million or less can delay 20% of their employees’ tax liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months.  

Top tip: 

Apply for the tax relief incentives that are relevant to you as soon as possible. Both SARS and the UIF will be inundated with requests and there will most likely be delays, so the sooner you begin the process the better. 

Standard Bank financial relief for businesses 

Standard Bank has a range of options available to support small businesses and business owners navigate the challenges presented by Covid-19: 

  • A Coronavirus Payment Interruption Scheme on business loans for small businesses with a turnover of less than R20 million per year 

  • A 3-month instalment relief for all personal loans for small business owners of businesses with a turnover of less than R20 million per year 

  • Standard Bank has partnered with the South African Future Trust (SAFT) for SMEs. SAFT is an independent trust set up by Nicky and Jonathan Oppenheimer to extend direct financial support to the employees of SMEs who are at risk of losing their jobs. An initial contribution of R1 billion has been put forward with the aim of mitigating the immediate economic impact of the Covid-19 crisis. 

Click here to read more about our financial relief solutions and here to find out more about SAFT and whether your business qualifies. 

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