Did you know that the private sector has contributed towards the establishment of various debt relief schemes in order to support businesses as a result of the COVID-19 pandemic?

As indicated in our previous newsletter covering debt relief schemes offered by the government on 09 April 2020, it has now become blatantly apparent for many businesses that the COVID-19 pandemic, the extended 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 particularly while this crisis continues.

In order to assist businesses and the economy, various debt relief and financial assistance schemes have been established by not only government, but also various private sector supporters. These measures are aimed primarily at assisting small and medium sized entities (“SME”). It may also be kept in mind that these debt relief measures are in addition to the tax incentives and the UIF relief scheme extended by government, as discussed in our previous newsletters.

We have compiled the following list of some of the most relevant debt relief and financial aid mechanisms established by and contributed to by private sector supporters and for which your business may be eligible to apply to for assistance:

Oppenheimer Fund (SA Future Trust)
This fund was established by a donation from the Oppenheimer family and aims to provide financial assistance to businesses that are affected by the COVID-19 pandemic and the national lockdown. In particular, assistance will be provided to SME’s in meeting their employer remuneration obligations to their employees, where these employees are at risk of losing their jobs or will suffer a loss of income as a result of the COVID-19 pandemic.

The fund will be administered by way of a trust which will provide interest free loans to businesses for a period of five years. There will be no minimum monthly repayment requirements as a condition of the loan and this must be settled in full at the end of the five year term.
If successful in their application, qualifying SME’s will receive R750.00 per qualifying employee per week, over a period of fifteen weeks, or R11,250.00 per permanent employee.

The total fund value available for assistance amounts to R1 billion.

Businesses who satisfy the following criteria will be eligible to apply:

• Applicants must have an annual turnover below R25 million.
• Applicants must have been trading for at least 24 months.
• Applicants must have been a sustainable business by 29 February 2020.
• Applicants must have been adversely affected by the COVID-19 pandemic.

Application requirements include the provision of the following:

• Company identification information
• Registration number (for company’s and close corporations)
• Master’s reference number (for trusts)
• ID number and address (for sole proprietors)
• PAYE number
• Income tax number
• Confirmation of employment status of employees

In order to determine if your business is eligible to seek assistance from this fund and launch an application, please contact any one of the four major banks in South Africa (namely FNB, ABSA, Standard Bank and Nedbank). Your usual banker should be able to assist you or point you in the right direction.

Rupert Fund (Covid-19 SME Fund)
The Rupert fund was established by way of a donation from Anton Rupert, with the aim of providing financial assistance to small businesses affected by the COVID-19 pandemic and the national lockdown. The financial assistance offered may be utilised to fund working capital.
The total fund value available for assistance amounts to R1 billion.

Business Partners Limited (a lending partner of FundingHub) is to administer the fund and therefore qualifying businesses must apply via this organisation in order to ascertain whether they qualify for the funding.

The funding provided in terms of this scheme ranges from a minimum of R250,000.00 to a maximum of R1,000,000.00 per applicant. The financial assistance will be structured by way of a five year loan, subject to the following conditions:

• The first twelve months of the loan terms will be interest free and it will not be required for successful applicants to make any repayments during this time.
• Interest will be levied at the prime interest rate for the remainder of the loan term.
• Successful applicants will not be required to give any security for the repayment of the loan, but every shareholder of the business will be required to sign personal surety.

It appears however, as at the date of this communication, that applications for assistance from this fund have closed, since as the fund has already reached capacity. More information will follow to the public as it becomes available.

Motsepe Foundation
Although this fund will not provide economic support to SME’s, it is interesting to take note of. The financial assistance offered by this fund is geared at procuring protective equipment and other resources to assist in combating the COVID-19 pandemic.

The total fund value available for assistance amounts to R1 billion.

Currently no information provided as to how this fund will be administrated and dispersed.

Naspers contribution
Like the Motsepe Foundation’s contribution, this fund will also not provide economic support to SME’s, but is also relevant to take note of. This fund aims to assist in the fight against the COVID-19 pandemic by making resources available to fund the acquisition of protective equipment, as well as to assist schools and fund other projects.

The total fund value available for assistance amounts to R1 billion.

Should your business require financial assistance during this time and be eligible for funding from these schemes, we encourage you to pursue these options further.

For the moment and at date of publication, this is the information we have obtained. We will keep you updated should any further relevant information come to our attention.

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.