Covid-19 Essential Services

Essential Services Funding

Established specifically to assist small and medium enterprises (SMEs) that are geared to take advantage of supply opportunities, resulting from the Covid-19 pandemic, or shortage of goods in the local market. Based on the needs of your business, if you are eligible it has been indicated that you will be able to apply for working capital (inventory, order, cash flow) and/or equipment finance. You will be able to apply for financing at an interest rate of prime minus 5%. This would mean an interest rate of 3.75% per yearHow this will  look is still to be confirmed by the department. The types of SMEs that will qualify to apply will be guided by National Command Council, in determining which sectors are deemed severely impacted. Should you want to apply, you will need to meet the following criteria: 

  • you must show a direct link between the impact or potential impact of the Covid-19 pandemic on your operations and loss of income your business 
  • proof will need to be provided that the business is negatively impacted by Covid-199 pandemic 
  • your business: 
    • must have been registered with CIPC by latest 28 February 2020 
    • must – be a 100% owned by South African citizens 
    • priority will be given to businesses owned by women, youth and people with disabilities 
    • should employ at least 70% South African nationals 
    • must be registered and compliant with the South African Revenue Service (SARS) and the Unemployment Insurance Fund (UIF) 
  • SMME employers who are not compliant with UIF must register before applying for relief 
  • for non-compliant Micro businesses, Seda will assist them to comply and request for assistance must be sent to growthfund@seda.org.za 
  • to qualify for funding you must also meet the government’s definitions of micro, small and medium enterprises  
  • the turnover threshold for businesses to qualify for the funding depends on the sector in which they operate
  • all the categories are in accordance with what was gazetted by the department last year
  • for further information please refer to the following link https://www.gov.za/sites/default/files/gcis_document/201903/423041gon399.pdf  

 To make an application you will need to: 

  • register on https://smmesa.gov.za/  
  • complete the simplified online application form available at 
  • upload the required supporting documents: 
      • CIPC Registration Documents 
      • FICA documents (e.g. Municipal accounts, letter from traditional authority) 
      • ID Copies of Directors/members  
      • 3 months Bank Statements 
      • Latest Annual Financial Statements or Management Accounts not older than three months from date of application 
      • Business Profile  
      • 6 months Cash Flow Projections – where applicable 
      • Relevant Industry Certification – where applicable 
      • Estimations for funding requested 

The intention of this fund is to insist those most in need. Anyone who tries take advantage of the crisis will be punished with their interest rates increased to prime plus 10%. This would mean chancers will have to pay 18.75% per year. 

CURRENT STATUS: applications are open  

For further information, please refer to the following link: http://www.dsbd.gov.za/wp-content/uploads/2020/03/SMME-Business-Growth-Resilience-Facility.pdf  

Should your business provide essential services and you wish to trade during the period of lockdown, you will need to obtain approval from the department. To apply, you will need to go the Companies and Intellectual Property Commission (CIPC) Bizportal website and obtain a certificate from the Commission which will allow you to continue trading.

The Bizportal website contains a menu icon listed as “Essential Service Businesses” through which an application can be made to the CIPC.

Companies already registered through CIPC’s BizPortal to perform essential services during the lockdown period, are required to have a new certificate for the extended period. The certificate will be sent via email using the details provided at the time of registration, and will also be available for download from Friday (17 April). Previously issued certificates must be disposed of, and the new certificates will be available to be displayed from start of business on Monday (20 April 2020).

CURRENT STATUS: currently open for application, apply here: www.bizportal.gov.za

The IDC has put a package together with the Department of Trade, Industry and Competition of more than R3 billion for industrial funding to address the situation of vulnerable firms and to fast-track financing for companies critical to our efforts to fight the virus and its economic impact. The majority of the R3 billion support will be allocated to the IDC’s existing small business clients with some of R3-billion that has been set aside by the IDC is expected to support the two funds – Debt Relief + Growth Resilience.

The IDC’s immediate priority is to focus on sectors critical to limiting the spread and immediate impact of the virus and to support supply chains critical for the South African economy. The IDC will support the manufacturing of essential medical products and make available R500 million for trade finance to import essential medical products with a specific focus on short term interventions.

An additional R700 million has also been provided by the DTIC from the Manufacturing Competitiveness Enhancement Programme (MCEP). The funding will be supplemented by IDC funding and has been specifically earmarked to assist suppliers of identified critical goods that are affected by the outbreak of COVID-19 pandemic. This additional funding will be shared with Small Enterprise Finance Agency (SEFA) and National Empowerment Fund (NEF), where IDC will receive R300 million and SEFA and NEF will each receive R200 million. The funds transferred to these institutions will be used to fund businesses that fall within the mandate of the institutions and support prioritised products that are required to curtail the impact of the virus.

For sector specific interventions, you will need to refer the IDCs website: https://www.idc.co.za/2020/03/24/idc-interventions-in-response-to-covid-19/

PDF details for application https://www.idc.co.za/wp-content/uploads/2020/03/IDC-Essential-Supplies-Funding-Intervention-COVID-192.pdf

CURRENT STATUS: applications are live and can be made on their website here

In partnership with the Department of Trade, Industry and Competition, the National Empowerment Fund (NEF) will facilitate funding for black entrepreneurs to manufacture and supply a range of medical products to help the country flatten the curve of COVID-19.

As a qualifying entrepreneur, you can expect funding of between R500 000 and R10 million in concessionary loans to purchase machinery, equipment and raw materials and to fund other working capital requirements for the manufacture and supply of medical masks, sanitizers, dispensers and related healthcare products.

total R200 million has been set aside for the purpose, and once disbursed you will be accorded a 12 month repayment holiday to help your businesses stabilize. The loans will be offered at 0% interest for the first year and thereafter at 2.5% per annum. The loans will be repayable over a maximum term of 60 months.

Applications are expected to take a total of 2 weeks from application to disbursement, following receipt of all relevant documents for commercially viable applications. The NEF says targeted entrepreneurs are those businesses already registered as suppliers with retailers and other institutions in good standing, as well as those that have a purchase order, a contract or letter of intent with a credible entity.

The priority product and service list encompass the following:

  • hand sanitisers
  • disinfectants
  • hand soaps
  • medical protective clothing
  • disposable plastic gloves
  • facial masks detergents / cleansing products
  • steel beds linen & hospital clothing
  • medical supplies
  • dispensers (water, soap & sanitisers)
  • toilet paper plastic bottling & moulding
  • mattresses & sponges
  • disposable caps
  • alcohol-based wipes

In order to be eligible for this support, you must:

  • be a registered South Africa company
  • be in good standing with a valid tax clearance certificate at assessment as well as before the loan is disbursed
  • be a current and registered supplier with retailers and other institutions in good standing or have a purchase order/contract/letter of intent
  • have a project with a minimum requirement of R500 000, require working capital or funds to purchase machinery and equipment, the fund WILL NOT service any debt or help settle monies owed
    • this project must result in retaining or increasing direct jobs
  • have greater than fifty percent (>50%) Black shareholding and management control
    • what this means is black management must be directly involved in the day-to-day running of the operation and must have requisite expertise in the sector
    • in line with the NEF’s transformation mandate, preference will be given to applications that demonstrate meaningful black women ownership, management, and control

The following information will be required to make an application:

  • declaration on BEE status and size of business
  • NEF application form (accessible on NEF website: www.nefcorp.co.za)
  • summary of production in the last 3 months
  • copy of the historical financial statements (up to 3 years if available)
  • signed copy of the contract, purchase order or letter of intent from the applicant’s client/s
  • financial forecast for the duration of the contract, order, or letter of intent
  • the forecast should include income statement, cash flow statement and balance sheet for the duration of the funding
  • additional information that would be necessary to enhance the application may be requested by the NEF as and when deemed necessary

CURRENT STATUS: Applicants may reach the NEF on covidfund@nefcorp.co.za and on 011 305-8080 for this emergency funding.

Applications are openhttps://www.nefcorp.co.za/wp-content/uploads/2020/03/NEF-COVID-19-Fund-Application-Form_Active-fields.pdf

For further information you can refer to the following link: https://www.nefcorp.co.za/wp-content/uploads/2020/03/COVID-Fund-Brochure-2020_9.pdf.pdf

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