No beating about the bush: the COVID-19 pandemic will have a devastating impact on retailers and their suppliers, especially small businesses who might not have a financial cushion to deflect some of the income blow from the lockdown and social distancing.
There were, however, various relief packages announced, especially for small, medium and micro (SMME) enterprises.
These were announced as Sports Trader was preparing to go to print and we would therefore urge you to visit the Home page of the government website with links to updated information on COVID-19 and relief funding.
Debt Relief Finance Scheme
This is administered by the Department of Small Business Development (DSBD) and only applies to SMMEs (see definition below). This could also provide assistance to acquire raw material, pay labour and other operational costs. An online application form will be published on the website http://www.dsbd.gov.za from April 2.
- Only SMMEs that are registered on the department’s database will be considered. Please register your business here.
- Businesses must prove that they were directly or indirectly negatively affected by COVID-19 measures — NOT businesses that had been in distress before the outbreak.
- Must supply supporting documents, e.g. that you were registered with CIPC by 28 February 2020, FICA documents, certified IDs of directors, three months’ bank statements and latest annual financial statements, a business profile and 6 months cash flow projections.
- Company must be 100% owned by South African Citizens and employees must be 70% South Africans. It is untrue that the company needs to be 51% black owned.
Company must be registered and compliant with SARS and UIF.
- If applying for rental relief you must provide a copy of the lease agreement or proof of ownership. If applying for payroll relief the details of employees and their banking details is needed.
- Priority will be given to businesses owned by women, youth and people with disabilities.
The department advises SMMEs to use their alternative email or call their hotline number 0860 663 7867. Seda, which promotes small businesses, will assist micro-enterprises to comply, but small and medium enterprises must assure their own compliance.
Rupert and Oppenheimer fund
These two prominent families each donated R1-bn to assist small businesses and their employees that have been financially impacted by COVID-19. The fund will be administered by Business Partners Limited — of which Remgro owns 43% — but at the time of going to print details of how and where to apply for assistance had not yet been published.
The COVID-19 Temporary Relief Scheme 2020 (TERS) UIF benefit from the Department of Labour aims to assist employers who are unable to pay their workers’ full salaries during the lockdown. They will electronically process applications received via email. Applicants should then receive an automated reply outlining the steps and requirement details. A PDF document, Easy-Aid Guide for Employers, explaining the procedures can also be downloaded. You can also follow @DeptofLabour and @UIFbenefits on twitter and visit the department’s website for regular updates. The hotline number is 012 337 1997. Read more in the Government Gazette No. 43161 9 of 26 March.
The COVID-19 TERS is not linked to other UIF benefits (including the normal TERS to financially assist distressed companies) and is aimed at employers who are unable to pay the full salaries of workers during temporary closure of business operations.
The contribution has a threshold of R17 712 per month, per employee and an employee will be paid in terms of the income replacement rate sliding scale (38% – 60%) in the UIF Act. To qualify, a company must be registered with the UIF and the company’s closure must be directly linked to the COVID-19 pandemic.
Retail property sector relief
The Department of Trade and Industry has announced that retail tenants and landlords may reach communal agreements to alleviate the negative impact of the lockdown through payment holidays, discounts and limitations on evictions. These agreements will be exempt from the provisions of the Competition Act, provided that it is done in coordination with the Department of Trade, Industry and Competition for the sole purpose of responding to the COVID-19 pandemic.
This will be known as the COVID-19 Block Exemption for the Retail Property Sector, 2020.
Read more here or in the Government Gazette No. 43134 of 24 March 2020.
Cargo in ports and air cargo
During lockdown the loading and off-loading of cargo in and out of all sea ports is permitted, according to this document. But, the regulations require improved hygiene control and sterilization during the whole loading, shipping and off-loading process.
Air cargo may be loaded and off-loaded at certain designated international airports, but according to the COVID-19 Restrictions on the movement of air travel all air cargo coming from medium to high-risk countries must be sanitised immediately after being off-loaded from the aircraft.
Cross-border freight movement may also continue to and from neighbouring countries, according to the Cross-Border Road Transport Special Dispensation (COVID-19) Directions of 25 March.
COVID-19 supply specific funding
Several funds have been established to provide support for the provision of equipment for those involved with combating the pandemic, or to provide relief for affected communities.
- The Growth/ Resilience Fund is aimed at SMMEs that are manufacturing essential goods, whether food or medical equipment and related goods needed to combat the pandemic. It is administered by the Department of Small Business Development.
- The Solidarity Response Fund gives individuals and organisations the opportunity to support efforts to prevent, detect, care for and support those whose lives have been impacted by COVID-19. The secure donations to this independently administered fund are tax-deductible. Gloria Serobe is the chairperson of the fund.
- The Motsepe family in partnership with companies and organisations that they are associated with, have pledged R1-bn to save lives and slow down the pandemic by purchasing sanitisers, disinfectant and other protective equipment, assist Government and health workers and provide water to poor and rural communities.
Who qualifies as a SMME?
Medium, small and micro businesses are defined by Government according to the number of employees and annual turnover.
- Medium businesses have 51-250 employees, small 11-50 and micro 0-10 employees. The maximum annual turnover threshold differs from industry to industry, e.g:
- Manufacturing: medium R170-m, small R50-m, micro R10-m.
- Retail: medium R80-m, small R25-m and micro R7.5-m.
- Wholesale: medium R220-m, small R80-m and micro R20-m.
- Transport, storage and communications: medium R140-m, small R45-m, micro R7.5-m.