Hello all,


A quick update on developments of this morning. The South African Future Trust established by the Oppenheimer family has donated 1 Billion rand to assist with the fallout of COVID-19. Our 4 main banks are administering the issuing of 5 year interest free loans to qualifying entities to assist them get through COVID-19 and beyond. This process is expected to be available by 03 April 2020.


QUALIFYING ENTITIES
Eligibility Criteria:

  1. Annual Turnover must be less than R25 000 000
  2. Entity must have traded for 24 months
  3. As at 29 February 2020 the business must have been sustainable
  4. The business must have been adversely affected by Covid-19

NEEDED DOCUMENTATION

  1. Entity Identification
  2. PAYE number
  3. Income Tax Number
  4. Confirmation of employment status of employees

BENEFITS AND OBLIGATIONS
From what we can gather from the initial text is that this is funding to allow companies who are still operating to be able to pay their staff full wage whilst turnover/profits have been adversely affected over the lockdown period. If the business is shut down and staff temporarily laid off it would make little sense to pursue this relief as the UIF benefits process should rather be followed.


So the idea in simple terms, and again, how we understand it, is best illustrated by way of an example.
Your business is still operating, albeit at 50% of usual Turnover and you comply with the eligibility criteria mentioned above. You however have 10 employees costing R10 000 each and the R100 000.00 monthly bill is causing you much lost sleep and annoying your stomach ulcer.


You therefore apply to the fund via your main bankers, who are solely facilitators and cannot charge you in their usual mercenary fashion. The fund will then pay each of the 10 employees their full salaries directly into their bank account every month. Let us say COVID lasts 4 months before the all clear is given (No not inviting a debate about how long this will last, purely for purposes of this example). At the end of 4 months the sun once again comes out and we are left with a 60 month interest free loan of R400 000 which assumedly would be repaid with a minimum payment of R6 667 per month. What this has allowed you to do is keep the money you have managed to earn and use it to continue to float your business, allowing blissful sleep to return and banishing that pesky stomach ulcer.


Folk, we think this is a pretty good deal if you are eligible and is hopefully the first of many initiatives designed to assist.


We are only at the beginning of what has the makings of a long journey and you are urged not to wait until the wolves have beaten their way through the door to react. Again, please forgive the brevity of this update but information is still in short supply. Our opinion may change daily as more information is released or as goalposts are shifted.


We will be speaking with the banks ourselves over the next day or two to try and get more details. As far as documentation goes, we have access to the bulk of it ourselves. If we process your payrolls, we would probably have all the information the bank requires.


Please feel free to get hold of your contact person at MRM for any support you need in this regard. In the interim we will be providing you with updates as they become available.

Stay safe,
Chris, Shireen and the MRM Team