COVID-19 is hurting businesses, thrusting South African SMEs into an uncertain future. If you’re a business owner, it’s hard to keep track of all the information around the outbreak and how it impacts your SME.
To help you stay updated with the latest developments, we’ve pulled together SME resources from government and business support organisations.
We’ll be updating this page regularly with new resources for SMES.
Latest updates: South Africa has now moved back into Lockdown Level 3 as of 28 December 2020. We see a return in the ban of alcohol sales and onsite consumption, restrictions on gatherings, and a curfew from 21h00 to 06h00 daily. Jump here for the full level 3 guide.
Jump to a specific section to learn more:
- General COVID-19 advice
- COVID-19 shutdown and South African SMEs: Impact on trading and Essential Services definition
- Government support for South African SMEs during the coronavirus outbreak
- Private sector support for SMEs
- The cost of business funding
- Will Lulalend still provide business funding during the coronavirus outbreak?
- Can I qualify for funding if my industry is affected by the coronavirus?
- What if my business is affected by the coronavirus?
- What should I do if I have more questions?
General COVID-19 advice
On 15 March, President Cyril Ramaphosa declared the COVID-19 outbreak a national state of disaster. (Full statement here.) A week later, the President announced a 21-day lockdown, effective from 26 March.
To further curb the spread of the coronavirus, President Ramaphosa announced the lockdown would be extended until the end of April. You can read the President’s full address here.
On 23 April, President Ramaphosa said once the full lockdown was lifted, there would be a “gradual and phased recovery of economic activity”.
During this time, South Africa will adopt a phased alert system based on the infection rate.
This means some businesses will be able to start operating under “specific conditions”. One of these measures is the return of staff in batches of one-third.
For the latest information from the government, visit the South African Government’s website.
The National Department of Health has set up a COVID-19 resource portal.
The site includes:
- Latest press releases from the Health Ministry
- COVID-19 prevention tips
- Social distancing guidelines
In addition, the National Institute for Communicable Diseases issues regular updates on new cases here.
COVID-19 Lock down levels and South African SMEs: Impact on trading
On 15 August, President Ramphosa announced that the country will be moving to Alert Level 2 on 18 August 2020, which allows even more businesses to operate.
For an overview about trading during level 2, please see our guide.
During level 2, in addition to those business activities previously allowed under Level 3 restrictions, the following business activities are now permitted:
- All accommodation establishments, including hotels, BnB’s and homeshares, such as Airbnb
- Bars, Taverns and Restaurants for sit-down meals and on-site alcohol consumption
- Fitness centres, gyms and health/wellness spas
- Inter-provincial travel for business and leisure
- Alcohol and tobacco product sales
“In each instance, specific and stringent safety requirements have been agreed on and will need to be put in place before a business can re-open, and protocols will need to be strictly adhered to for businesses to remain open,” said Ramaphosa.
The government will announce more detail on the re-opening of these businesses.
Here is a list of what the government regulations define as essential services:
If your SME falls into this category, you need to apply for an essential services certificate from the Companies and Intellectual Property Commission. You can apply for a certificate from CIPC’s Bizportal website here.
Government support for South African SMEs during the coronavirus outbreak
A package of support programmes will help SMEs during the shutdown, announced President Ramaphosa.
On 21 April, President Ramaphosa revealed a R500 billion coronavirus relief package.
SME initiatives include:
- R2 billion support package for SMEs and spaza shops (more detail to be released)
- R200 billion loan scheme with banks (more details set to be released)
- Expanded tax relief
Below, we provide a broad overview of the key government support.
The Department of Small Business Development set up an SME Support Intervention to help SME owners who are struggling to survive. The department released the news on Facebook, and you can view the full statement here.
Here is an overview of the Department of Small Business Development’s funds:
Two key funds are:
- SMME Debt Relief Scheme
- Business Growth and Resilience Facility
In a press briefing, government announced qualifying businesses must meet the following criteria:
- 100% South African-owned
- 70% of employees must be South African
The Department of Small Business is aiming for a 14-day turnaround to release funds. You can watch the full briefing here.
The department has released application guidelines and more detailed criteria, including the type of documents you need when you apply. You can find the guidelines here.
To access funding, follow these steps:
- Register on www.smmesa.gov.za
- Complete the application forms. You can download the forms from the same site: http://www.smmesa.gov.za/
- Upload the supporting documentation
- At this stage, applications must be emailed
|Funds||Supporting documents||Key contacts|
|Debt relief finance scheme||Company statutory Documents;|
FICA documents (e.g. municipal accounts)
Certified ID copies of Directors;
3 months bank statements;
Latest annual financial statements / Latest management accounts;
6 months cash flow projections (where applicable);
Copy of lease agreement or proof of ownership if applying for rental relief
Employee details (bank details and UIF) for help paying salaries
|Business Growth and Resilience Facility||CIPC registration documents;|
FICA documents (e.g. municipal accounts);
ID Copies of directors/ members;
3 months bank statements;
Latest annual financial statements /management accounts;
6 months cash flow projections (where applicable);
Industry certification (where applicable);
Estimations for funding requested
|COVID-19 TERS||Letter of authority: letter on a company letterhead giving an individual permission to lodge claim |
Agreement between the employer, bargaining council, and UIF
Template from the UIF with relevant information from employer
Last three months payroll
Certified latest bank statements
|012 337 1997 /email@example.com|
In addition, the government has published Request for Proposals to get more information from South African-owned SMEs that participate in medical supplies and other essential goods. The goal is to get more of these businesses involved in manufacturing the goods.
If you are a textile or clothing manufacturer, you could help produce cloth face masks. All South African-owned SMEs can apply for this COVID-19 SME opportunity. Masks must be 100% locally manufactured. The deadline to provide your business information is 30 April.
Keep the following information on hand hen you submit your information:
- CIPC incorporation documents
- Statutory document
- FICA documents
- ID Copies
- Proof of bank account
- Business profile
If you want more information on these support measures, you may want to read these blog posts:
- An overview of the COVID-19 government funds for SMEs
- More detail on COVID-19 tax relief for SA SMEs
Private sector support for SMEs
Business support organisations, like the South Africa Small Business Institute, have warned that the outbreak could cripple SMEs.
In response, a range of interventions to support SMEs have been announced.
The Oppenheiemer family set up the South Africa Future Trust, seeding the funds with a R1 billion pledge. Businesses can apply for interest-free loans from the fund. A key goal of this fund is support SMMEs to pay staff salaries. Businesses can apply for the loan from their banks. You will need to attach a list of employees at risk because of the coronavirus.
Other resources include:
- The National Small Business Chamber’s COVID-19 Relief centre helps businesses to create business continuity plans, digital marketing strategies, and help to develop hygiene programmes.
- Facebook announced a $100m package of cash grants and ad grants for 30,000 small businesses in 30 countries. To learn more, visit Facebook.
The cost of business funding
COVID-19 has created a challenging economic environment. In response, the South African Reserve Bank has cut the repo rate, bringing down the cost of debt.
On 14 April, the South African Reserve Bank announced that the Monetary Policy Committee had dropped the repo rate by 100 basis points.
This comes after a 100 basis point cut on 19 March.
On Thursday (19 March 2020), the South African Bank announced that the Monetary Policy Committee had dropped the repo rate by 100 basis points.
Lesetja Kganyago, Governor of the South African Reserve Bank, said the coronavirus would “negatively affect global and domestic economic growth through the first half of 2020”.
“Monetary policy can ease financial conditions and improve the resilience of households and firms to the short-term economic implications of Covid-19.”
Here’s a copy of the full statement.
Will Lulalend still provide business funding during the coronavirus outbreak?
Your business matters to us. Supporting you to succeed has always been our mission. That hasn’t changed.
We’ll continue to make it easy for you to access business funding.
Because we’re a technology company, you can still apply online in minutes and get your funding in 24 hours. And, remember, if you’re on our credit facility, the process is even faster because you don’t need to reapply.
Can I qualify for funding if my industry is affected by the coronavirus?
Over the past few weeks, we’ve been speaking with SMEs about the impact of the coronavirus. Some industries, like tourism, are being hit hard. But, we’re not excluding any businesses based solely on industry.
Instead, we’ll continue to use the proprietary technology we’ve built especially for assessing SME’s, combined with any risks due to coronavirus.
What if my business is affected by the coronavirus?
This is a difficult time for businesses and things are changing fast. If you realise you’re going to struggle to make your repayments, contact us as soon as possible. Together, we can find a solution.
We’re here for you and will continue to do all we can to help you.
What should I do if I have more questions?
Reach out to your account manager or contact us anytime via:
Phone: 087 943 2381 / 021 201 1550
Or, join our private Facebook group, SA Small Business Unlocked, where South African SMEs connect and support each other.