The COVID-19 pandemic has dealt a serious blow to the tourism industry in South Africa, leaving especially tourism SMMEs incredibly vulnerable.
Fortunately, the government and the private sector have stepped up to offer tourism SMMEs much-needed financial assistance.
Tourism Relief Fund
Today, 07 April, the Tourism Relief Fund officially opened for applications.
The Tourism Relief Fund provides once-off capped grant assistance to Small Micro and Medium-Sized Enterprises (SMMEs) in the tourism value chain to ensure their sustainability during and post the implementation of government measures to curb the spread of COVID-19 in South Africa.
Capped at R50 000 per entity, grant funding can be utilised to subsidise expenses towards fixed costs, operational costs, supplies and other pressure cost items.
Guided by the Tourism Broad-Based Black Economic Empowerment (B-BBEE) Codes of Good Practices approved by the Minister of Trade and Industries in 2015 (in line with the BBBEE Act No.53 of 2003), the Tourism Relief Fund is administered in line with the objectives of Economic Transformation, and the vision to ensure sustainable and inclusive tourism development.
Categories eligible to apply for the Tourism Relief Fund include the following:
- Accommodation establishments: Hotels, Lodges, Bed and Breakfast (B&B’s), Guest Houses and Backpackers.
- Hospitality and related services: Restaurants (not attached to hotels); Conference venues (not attached to hotels); Professional catering; and Attractions
- Travel and related services: Tour operators; Travel agents; Tourist guiding; Car rental companies; and Coach Operators.
To access further information on funding criteria and the application process click here.
Apply for funding: Online application form
The Tourism Relief Fund isn’t the only option for tourism businesses. SATSA published a handy overview of the options available on its COVID-19 microsite.
National Disaster Benefit
An employer may decide to close their entire business for a period and send employees home. If an employer cannot pay their employees for this period, the employer can apply for the National Disaster Benefit from the UIF.
This benefit will be at a flat rate equal to the minimum wage (R3 500) per employee per month for the duration of the shutdown or a maximum period of three months, whichever period is the shortest.
Please note that there is currently some uncertainty around how this will be implemented and SATSA will keep its members updated as more information becomes available.
SMME Debt Relief Fund
The Department of Small Business Development has made over R500 million available immediately to assist small and medium enterprises that are in distress through a simplified application process. Check the website for more information and to submit your application.
Unemployment Insurance Fund
The Unemployment Insurance Fund (UIF) will compensate affected and eligible workers through its existing Illness and Reduced Work Time benefits. The Department of Employment and Labour has a guide for employers and declaration forms available on its website
National Small Business Chamber’s Small Business Relief Centre
The National Small Business Chamber (NSBC) has launched the COVID-19 Small Business Relief Centre in a bid to help small businesses during this crisis.
The centre will focus on assisting small businesses on the following key areas: low-interest disaster recovery loans, moratoriums on vehicle and equipment leases, bond repayments, supplier negotiation and communication, landlord negotiation with regards to property leases, increased cleaning, disinfecting and hygiene protocols, digital marketing strategies in a time of crisis, quick digital migration for meetings, business continuity plan creation and more. Click here to read the statement from the NSBC.
You can read more about the Solidarity Fund here
This is what we know so far.
The Trade and Industry Minister Ebrahim Patel has described the Solidarity Fund as follows: ‘It’s designed to unite the nation and accelerate the country’s response to COVID-19. The focus of the fund is in four areas – it’s to alleviate the suffering and distress caused by the virus to the country and to mobilise the support of business and civil society in support of Government’s effort’.
‘The fund, kick-started by donations of R1 billion each from the Rupert and Oppenheimer families, is intended to help mobilise business and civil society to back government efforts to contain the spread of COVID-19.’
No specific criteria have been issued for how and who can apply for assistance from the Solidarity Fund yet. We are sure that this will change in the coming days.
Temporary Employer/Employee Relief Scheme
There is also the Temporary Employer/Employee Relief Scheme (TERS) which is being administered by the Department of Labour and Employment. In terms of the TERS process, the Unemployment Insurance Fund (UIF) may fund distressed companies directly in order to prevent retrenchments.
Here is an easy aid to understanding TERS. Bear in mind that it was not created with COVID-19 in mind, so we expect to see some changes to the process.
The application form can be downloaded here
Will there be debt relief for businesses from private banks?
In his speech on 23 March 2020, President Ramaphosa said the following:
‘Commercial banks have been exempted from provisions of the Competition Act to enable them to develop common approaches to debt relief and other necessary measures.’
Standard Bank, Nedbank and FNB have already made announcements regarding debt relief for customers impacted by coronavirus and members are advised to reach out to their banks to find out what options are available to them.