What is an SMME?

SME Assistance During COVID-19

What is an SMME?

According to the National Small Business Act, there are three categories of small businesses.

Their characteristics can be summarised as follows:

Micro enterprise Small enterprise Medium enterprise
Number of employees 1 - 5 employees < 100 employees Up to 200 employees
Annual Turnover < R0.15 million < R10 million < R20 million
Formalities Informal - no license, formal business premises More established than very small enterprises, formal and registered, fixed business premises Still mainly owner managed, but decentralised management structure with division of labour
Operations Basic business skills and training. Potential to make the transition to a viable formal small business Owner managed, but more complex management structure Operates from fixed premises with all formal requirements

Why a debt relief scheme?

To assist businesses during this difficult time, the Department of Small Business Development has launched a debt relief fund to help mitigate the impact of the economic shutdown caused by the coronavirus on small, micro and medium enterprises (SMMEs).

For SMMEs to be eligible for assistance under the debt relief fund, the applicant must demonstrate the direct link of the impact or the potential impact of Covid-19 on business operations.

The grants offered will vary from R1 000.00 up to a maximum of R100 000.00

While a grant does not have to be paid back, all successful applications will be required to actively participate in the above mentioned non-financial business support services, for a period of two years.

Grant types:

Grants will be issued to the following:

  • Individual grants will be issued to (Formal and informal businesses) who are at the promising and start-up phase of their development or development stage.
  • Co-operatives: which are autonomous association of persons united voluntarily to meet their common economic and social needs and aspirations through a jointly owned and democratically controlled enterprise organised and operated on cooperative principles.

What type of businesses can apply?

Types of businesses
  • motor mechanics/panel beaters
  • electricians
  • plumbers
  • domestic appliance repair services
  • beauticians and hair dressers
  • cleaning companies
  • small scale recycling companies
  • street vendors
  • car washes
  • others
Eligible industries
  • Mining
  • ICT
  • FMCG
  • Medical and Pharmaceutical
  • Tourism
  • Property
  • Construction
  • Infrastructure
What type of businesses can apply?

Qualifying criteria

The business must have been registered with CIPC by at least 28 February 2020;
Company must be 100% owned by South African citizens;
Employees must be 70% South Africans;
Priority will be given to businesses owned by Women, Youth and People with Disabilities;
Company must be registered and compliant with SARS and UIF

Required documents

Proof that the business is negatively affected by COVID-19 pandemic;
Company Statutory Documents;
FICA documents (e.g. Municipal accounts, letter from traditional authority);
Certified ID Copies of Directors;
3 months Bank Statements;
Latest Annual Financial Statements or latest Management Accounts not older than three months from date of application – where applicable;
6 months Cash Flow Projections – where applicable;
Copy of Lease Agreement or Proof ownership if applying for rental relief;
If applying for payroll relief, details of employees - as registered with UIF and including banking details – will be required as payroll payments will be made directly to employees;
Facility Statements of other funders;
Detailed breakdown on application of funds including salaries, rent etc. Businesses which are negatively affected due to the CoronaVirus Pandemic

How can we help Employers?

  • We assist with the risk management process and look at the business holistically
  • Assist in the entire application process
  • Check with SEDA if your business complies
  • Registration on the National SMME Database
  • Assistance to complete the online application form
  • Upload Required Supporting Documents

Contact us at info@bizarmour.co.za

010 140 6251

The information shared on this article/blog/vlog should be read and understood within the current legal framework of South Africa. It is meant purely for educational discussion and does not amount to legal advice. For specific legal advice, please consult a legal practitioner prior to application.

Posted in COVID-19.