How SMEs can access relief packages.
According to a recent survey done by Retail Capital, 69,8% of local small and medium enterprises (SMEs) are closed as a result of the national lockdown, with 85% reporting a decreased turnover. As such, the South African Government, big businesses and civil society have recognised the impact that COVID-19 is having on local small businesses and have implemented a host of relief packages.
To help SMEs take advantage of these packages, Nadine Chetty, co-founder at E-comm Accounting Solutions and Intuit QuickBooks trainer, says that there are two important steps that business owners can take in order to access most of these relief measures. “Firstly, small businesses need to be tax compliant. If they are compliant, business owners need to register on www.smmesa.gov.za to take advantage of these opportunities.”
Tax compliance means business owners must have a valid tax clearance certificate, as well as management statements and annual financial statements. “If you don’t have these, you will need to get them up to date as soon as possible,” she says.
Although compliance is not always an SME owner’s first concern, the current situation shows the importance of this, Chetty adds. “In order to remain compliant it is vital that management statements and annual financial statements are up to date. As such, it is advisable that business owners utilise the help of an accountant or financial advisor.”
Chetty points out that accountants and financial advisors are still able to operate during a lockdown. She says that for example, in her practice they are able to still keep their clients SARS compliant even during this time by using Cloud Accounting Software like QuickBooks Online which allows them to work with their SME clients from anywhere at any time. “It is key that small and medium-sized business owners take this time to focus on their business’s finances and admin, which is often forgotten as most business owners focus most of their attention on running their companies.”
In order to assist small business owners that are tax compliant, Chetty has compiled a list of relief and funding options:
Registering as an essential service business
You can keep your business open if it offers essential goods or services. You can apply on the BizPortal website.
This is administered by The Department of Tourism to help SMMEs in the tourism and hospitality sector who are under particular stress due to COVID-19 travel restrictions. The Fund Value is R200 million.
- Registered legal entity with CIPC
- 100% Black-owned entity
- Turnover does not exceed R 2 500 000
- Must be SARS Tax Compliant (Tax Clearance is required)
- Proof of minimum wage compliance
- Proof of employees registered in UIF
- Guarantee employment of staff for a minimum of three months
- Must have traded for at least one financial year
You can apply by emailing firstname.lastname@example.org
Debt Relief Finance Scheme & Business Growth/Resilience Facility
Administered by the Department of Small Business Development to help businesses that are negatively affected, directly or indirectly, by the COVID-19 pandemic. Its aim is to mitigate against job losses and the expected harsh economic impact. The Fund Value is R500 million.
- Must be registered with CIPC by at least 28 February 2020
- Must be 100% South African citizen-owned
- Employees must be 70% South African
- Priority for funding will be given to businesses owned by Women, Youth and People with Disabilities
Apply at www.mybindu.org.za