An earlier version of this article stated that the R1 billion donation was in fact not a donation, but a loan. This is inaccurate, as the R1 billion is a donation. Moneyweb regrets the error. Read a full apology here.
Small and medium enterprises (SMEs) may apply for R250 000 to R1 million in funding from the R1-billion donation the Rupert family made to assist businesses in financial distress as a result of Covid-19.
Business Partners, a subsidiary of Remgro, will administer the process. An online application portal will be launched by the end of the week through which SMEs can apply for assistance.
The Rupert family founded Business Partners in 1981 and it has since been providing a range of funding and related support services to SMEs.
“We expect to make an announcement regarding the criteria, repayment terms and how to apply for the finance this week,” Business Partners Managing Director Ben Bierman said on Sunday,
David Morobe, the executive general manager for impact investment at Business Partners, explained that assistance will be in the form of a loan, which is repayable over a period of five years. “For the first year, applicants will not have to pay interest or instalments, but thereafter they will be expected to do so. We are hoping that the impact of Covid-19 would have receded and the businesses will be able to repay the loans on commercial terms.”
He says that applicants must prove that their businesses are in financial distress as a result of Covid-19. “We are going to look at a number of factors such as the extent of a decline in revenues, while still having to pay overheads such as salaries and rent. The businesses also need to meet the following criteria:
- South African owned;
- Tax compliant
- Have annual financial statements
- A three-month bank statement
- Proof of the employment of employees
- Rent statement
- Supporting documentation showing how the business is in distress as a result of Covid-19
There will be no financial assistance to businesses in primary agriculture, mining and non-profit organisations.
Morobe also called on other creditors such as banks and landlords to come on board and assist SMEs and to allow them some breathing space.
Morobe said all funds that SMEs repay in terms of the scheme, will be reused to assist other distressed SMEs in future.