Business Partners is going live on Friday 3 April 2020 with its portal (visit www.businesspartners.co.za) for the distribution of the R1 billion donated by the Rupert family for the benefit of small businesses in SA to help them survive the Covid-19 lockdown.
Speaking to Accounting Weekly, Business Partners chief operating officer Mark Paper made it clear that the R1 billion has been made available in perpetuity by the Ruperts and does not have to be repaid to the family.
“These funds will be used for the benefit of SMMEs into the future. The funds will be distributed by Business Partners in the manner prescribed by the Rupert family. It is important to note that Business Partners will charge no fees on the administration of these funds, nor will we be charging for regulatory and other costs, such as audit and bank fees,” says Paper.
Nicolaas van Wyk, CEO of SA Institute of Business Accountants (Saiba), says accountants’ services will be critically important in preparing the documentation required for the R25,000 grants and zero percent loans over 12 months being made available to close corporations, companies and trusts. “This gesture by the Rupert family at this critical time is astonishing and we hope other South Africans step up to the plate and follow this example by donating funds for disbursement to people and businesses in need. We know that SA companies are sitting on hundreds of billions of rands in cash that could be made available to keep the SMME sector alive.
“Business Partners appear to have made the application process as simple as possible under the circumstances, and we are urging our members to assist by making their services available on a pro bono basis.
“It’s important that businesses and sole proprietors act quickly, as the funds will be disbursed on a first come-first served basis, which means there is room for about 4,000 sole proprietor grants.”
The funds are being allocated as follows:
- Formal sole proprietors: R100 million has been set aside for disbursing to “formal sole proprietors” (FSPs). Qualifying FSPs will receive grants of R25,000 which does not have to be repaid, though Paper says any recipient of grant funds is encouraged to return part or all of the money once they are in a financial position to do so in the interests of helping other FSPs.
Application can be made online at www.businesspartners.co.za, where the following documents are required:
- Copy of ID
- Proof of tax compliance
- Proof of funds flowing through a bank account
- Verification of bank account details
All of this will be verified by Deloitte on a pro bono basis, and funds should be paid out within seven days. “There are many types of business that operate for personal benefit of the sole proprietor, such as fruit sellers and street vendors, but they have to show they are ‘formalised’ in terms of business compliance, such as tax compliance or municipal licensing if applicable. The main point is that they must show that transactions flow through a formal bank account,” says Paper.
2. Close corporations, companies and trusts: grants of R25,000 will be made available, as well as loans to cover four months’ overheads, charged at 0% interest for 12 months. There is no obligation to pay interest or capital for a period of 12 months. Thereafter, interest is charged at prime, which is currently 8.75%. The grant portion of R25,000 does not have to be repaid, though recipients are being asked to voluntarily “pay it forward” when they are a financial position to do so. Loan sizes are expected to vary from R250,000 to R1 million. These are unsecured loans, and no surety will be required from recipients.
Here are the documents required:
- Clean credit record
- Proof of solvency prior to outbreak of Covid-19 (ie. proof of ability to pay bills)
- Tax clearance certificate
- Proof of PAYE payments on behalf of employees
- Annual financial statements up to February 2019
- Management accounts up to December 2019
- Copy of rental statements
- Copies of director IDs and office rental statements
Once the application and documents have been verified by Deloitte, funds should be disbursed within seven days.
“The purpose of the grants and loans to companies, CCs and trusts is to cover overheads, not to settle debts,” says Paper.
Says Van Wyk: “Applicants need to move fast, and we are asking accountants to make their services, or a portion thereof, available pro bono to clients so we can all survive this crisis.”
- This article was amended to correct an error suggesting grants of R250,000 would be made available by Business Partners. The actual grant figure is R25,000, though loans of R250,000-R1 million are being considered.