Relief and advice for SMMEs weathering the storm

The disastrous impact of the COVID-19 pandemic has no doubt heralded an unprecedented panic amongst the public, businesses, and of course government Ministers and employees at the forefront of the battle.

It has brought out the best and the worst in people and organisations alike. It has produced heroes who risk their lives on a daily basis and villains set on taking advantage of the situation. Fortunately it has also seen some of the more fortunate come forward to extend a helping hand to those who are drowning!

How do SMMEs weather the storm?

Although some of the giants of industry and the corporate world have fallen, or are at least tottering badly, SMME’s will probably be the biggest casualties at the end of this whole mess. They are, for the most part, the most vulnerable in times of distress. Fortunately though there are some relief options available right now to them:

A word of caution

At the outset be warned that two stringent conditions are attached to the available relief funds, the first being that your business needs to be fully up to date with SARS and secondly, although they have great interest rates and easy repayment terms, these are loans and should not be mistaken as free grants.

Guaranteed Loan Scheme for SMMEs

This scheme is being rolled out by the banks and the initial phase is only available to companies with an annual turnover of less than R300, 000,000 and obviously in good standing with their bank. Some of the notable features are:

  1. Funds borrowed through this scheme can be used only for operational expenses such as salaries, rent and lease agreements, contracts with suppliers, etc.
  2. Individual businesses can accept only one COVID-19 loan.
  3. Loans will cover only up to 3 months operational costs and drawn every month.

The Department of Trade and industry Small Business Relief Fund

There are a Business Growth/Resilience Facility and a Debt Relief Finance option. Only one of these can be applied for.

The SAFT (The South African Future Trust) – known as ‘the Oppenheimer family fund’

SAFT (an independent trust set up by the Oppenheimer family) have partnered with certain local banks – I.E. Absa, First National Bank, Investec, Nedbank, Mercantile and Standard Bank to extend financial support to SMMEs.

These 5 year, interest-free loans, administered by the Partner Banks on behalf of SAFT, will be paid out as concessionary loans – only to qualifying SMMEs.

In the case of all these relief funds we cannot set out the terms of what will qualify your business, but you need to apply to find out if you are eligible. If you don’t ask, you can’t receive!

It’s not too late for financial advice

The inclination, when many SMEs facing liquidation are advised to look for alternatives and seek advice, is to say “Well that ship has already sailed!” This is really not necessarily so and astute Financial Advisers can very possibly assist you to obtain relief, shift assets, consolidate debt, find alternative more cost effective ways of operating etc.

It ain’t over ‘till the fat lady sings’ and ‘weathering the storm’ means finding innovative ways to avoid just letting go and drowning. Hereford Group have for 25 years been finding solutions, not for the masses, but for individuals and individual companies, all unique and all facing different issues.

We are there for you – contact us and let us advise you before you throw in the towel. We are here to assist and ensure that when the next disaster comes along you will be far better prepared to meet it head on – and ride the tide of misfortune like a surfer who has just found the perfect wave!

Stay positive and stay safe.


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