All small businesses may apply for coronavirus debt relief funding

But should employ at least 70% South Africans, among other criteria.
Image: Waldo Swiegers, Bloomberg

The minister of small business development has slashed rumours that the coronavirus Debt Relief Fund will only assist majority black-owned businesses.

This follows the circulation on Monday evening of a fake Department of Small Business Development screenshot on social media. It stated that the fund set up by government to help alleviate the economic impact of the coronavirus on small businesses is intended for use by 51% black-owned businesses only.

Image: Twitter

Addressing the media on Tuesday morning, Minister of Small Business Development Khumbudzo Ntshavheni emphasised that all small businesses are eligible to receive financial aid.

“We are supporting all small businesses in SA,” she said, emphasising that this means businesses across racial demographics.

She added that the department will make sure the fund has demographic as well as geodemographic “spread”.

Government is establishing the fund with the help of the R2 billion donated by the Oppenheimer and Rupert families to assist small businesses.

Ntshavheni said businesses wanting to apply for funding assistance need to meet several criteria:

  • They must be 100% owned by South African citizens
  • They should employ at least 70% SA nationals
  • They must be registered with the South African Revenue Service (Sars) and tax-compliant.

She said priority will be given to businesses owned by females, the youth and persons with disabilities.

To access the fund, businesses are required to register on the SMME South Africa platform.

However, the website, which was launched on Tuesday morning, provides very little detail on how small businesses will access the ‘solidarity fund’ mentioned by President Cyril Ramaphosa in his 21-day lockdown address to the nation on Monday evening.

It requires applicants to fill in the details of their shareholder/s as well as their employee demographics and whether or not they require financial assistance or non-financial assistance.

Source: SMME SA platform (smmesa.gov.za)

The website also fails to make provision for applications related to the tax subsidy or the temporary reduction in employer and employee contributions to the Unemployment Insurance Fund, and employer contributions to the Skill Development Fund.

Not ‘free’ money

Ntshavheni said businesses may apply for financing at an interest rate of prime minus five percentage points, which currently means 3.75% per annum.

She reiterated what Ramaphosa said on Monday night about suppliers that are trying to take advantage of the pandemic for personal gain through excessive pricing.

“Those who try to take advantage of the crisis will be punished with interest rates of prime plus 10 percentage points,” Ntshavheni said. This means chancers who abuse the system will have to pay 18.75% in interest per annum.

Non-SA citizen spaza shops will be closed

Ntshavheni added that during the lockdown only those spaza shops that are owned and run by South Africans are permitted to remain open.

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

AUTHOR PROFILE

COMMENTS   8

You must be signed in to comment.

SIGN IN SIGN UP

The last time I looked at the definition (and ideals) of solidarity, it represented (and promised) common interest and mutual support and the potential for real nation building. Not 51% in favor of one ethnic group. Covid-19 does not care what colour you are and neither should we. We’re South Africans together in this regard.

Don’t racially descriminate on the virus.

At this rate they can pay the BRP.

On any proper company SARS would have years of PAYE data. A simple solution is to make available at 0% interest rate say three months’ PAYE as a loan, repayable by way of an addition to the future PAYE over next 12 months. That would take a programmer a day to implement. Run it all through SARS!

There was a response from the Dept of Small Business Development on Twitter saying it was a draft.

So, basically, they just got caught out, and are now back-tracking.

Fake news is a bad thing. But calling the truth fake news is also not good.

Why bring BEE into the Covid-19 crisis

Has anyone managed to register – the site seemingly cannot be reached? Makes one wonder… 2 Billion is a heck of a fund to disappear into thin air.

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

NEWSLETTERS WEB APP SHOP PORTFOLIO TOOL TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: