The billionaire Oppenheimer family will disburse their R1 billion COVID-19 pledge as interest-free loans to small, micro and medium-sized businesses.
Nicky and Jonathan Oppenheimer have established the South African Future Trust (SAFT), which “will extend direct financial support to SMME employees who are at risk of losing their jobs or will suffer a loss of income because of COVID-19.”
SAFT, which will operate independently from the Oppenheimers, will start accepting applications from interested SMMEs from Friday, 3 April, 2020.
How it will work
According to its website, “SAFT will transfer funds directly to employees of participating SMMEs, via interest-free loans where employees themselves carry no liability.”
“Our aim is to enable SMMEs to significantly reduce their cash outgoings and continue operations during this time of crisis, while retaining their employees – affording these companies much-needed breathing room to make long-term decisions,” it added.
Eligible SMME employers will need to apply via their respective banks along with a list of employees who are may be impacted by COVID-19. Currently, the four major banks – Standard Bank, Nedbank, FNB and ABSA – are the participating “partner banks” and have also waived their usual credit fees for all SAFT COVID-19 loans.
Employers will submit documentation on behalf of their employees, who will then receive funds directly from the partner banks if they qualify. The SMME will then repay SAFT at an interest-free rate over a period of five years.
To qualify for funding, SMMEs need to have an annual turnover of less than R25 million and should have been trading for at least 24 months.
They should also have been sustainable businesses as of 29 February, 2020 and should be adversely affected by COVID-19.
Required documentation includes registration number (for companies and close corporations), master’s reference number (for trusts), and ID number and business address (for sole proprietors).
SMMEs will also be required to provide a valid PAYE Number (if applicable), valid income tax number, and confirmation of permanent employment status of employee(s).
Should an SMME be unable to repay the loan, SAFT will work closely with it to put in place a sustainable repayment plan.
SAFT’s website further states, “Once the current crisis has passed, SAFT will have an ongoing role in accelerating economic growth within South Africa.
“Any further funds donated, and any loans repaid, to SAFT will remain within this non-profit structure. They will be used to support initiatives with a focus on employment creation.”
For more details, visit SAFT’s website here.