The President announced during his 23 March Coronavirus Lockdown speech a relief fund for SMMEs to fund working capital and direct costs. Over the past few days further guidance has arisen around this scheme amidst a raft of “fake news”. Notably that the scheme will be available for SMMEs in good standing with SARS and the Department of Labour; have 100% South African ownership and 70% South African employees; with priority given to women, persons with disabilities and youth businesses (although the latter statement was made in a speech and is not confirmed).
We understand the funding terms are (not yet certain):
- The facility will be for working capital only (direct, auditable costs)
- Maximum R500,000 per SMME will be considered
- Terms of the funding will be dependent on the business’s cash flow
- Loan facilities will be at Prime less 5%
- Any misuse of funds will need to be repaid at Prime +10% (indicative)
Application can be made through http://www.smmesa.gov.za/ . The website is working and one can register. We cannot yet give feedback on what happens thereafter. We will keep an eye on it and update clients as we see progress.