The Oppenheimer family has launched the South African Future Trust (SAFT) and tasked Nedbank, FNB, Standard Bank and Absa to facilitate the distribution of loans to small businesses.
Nicky and Jonathan Oppenheimer in a statement said the SAFT will transfer funds directly to employees of participating SMMEs, via interest-free loans where employees themselves carry no liability.
“We have also been encouraged by the creation of other important initiatives in providing targeted relief to SMMEs, such as those planned by the Department of Small Business Development, as well as commitments made by other South African families,” the two said.
“Because it is focused exclusively on supporting SMME employees, SAFT will operate separately yet seek to complement and amplify these initiatives.”
The SAFT has been capitalised with R1 billion President Cyril Ramaphosa announced the family had pledged to assist small businesses hammered by COVID-19.
Applicants need to apply through their main bank, meaning those who bank with Capitec will not be able to apply.
“The scheme is currently available to clients of these four banks whose businesses were financially sustainable prior to the COVID-19… We are working hard to extend this partnership to other banking institutions and invite their participation,” the Oppenheimer’s said.
Nedbank Retail & Business Banking Managing Executive Ciko Thomas said the banks will administer the scheme at no cost to the fund and that the lenders have also waived their normal credit fees for all loans approved under the SAFT scheme to maximise the funds available to recipients.
“Nedbank acknowledges that this is a time of heightened anxiety for our small business clients and their employees, not just in terms of their personal health but also their economic survival,” Thomas said.
SAFT’S criteria:
Who is eligible for support?
-SMMEs with turnover <R25m;
-Trading for at least 24 months;
-Business was in good standing as at 29 Feb 2020;
-Has been negatively impacted by Covid-19;
-Not able to pay or retain permanent employees.
-How much money will SMME employees receive?
SAFT funding is intended as immediate and short-term relief to enable businesses to continue operations, while protecting jobs. Businesses can apply for funding of R750 per employee per week, for a period of 15 weeks. This is intended to cover both the lockdown period and its immediate aftermath. This payment is not a salary. It is intended to provide short-term relief to those who might otherwise become destitute.
How will SAFT fund SMME employees?
During this initial COVID-19 period, SAFT offers a 5-year loans, interest-free loan to the business. Funds are to be paid directly into the employees’ accounts. There is no minimum monthly payment requirement, the loan only needs to be repaid at the end of the period.
Will employees have to pay back any money?
No. Employees carry no liability.
How will the businesses afford these loans?
SAFT loans will be:
Interest-free for a five-year period.
Subordinated to other pre-existing debt.
If businesses are unable to repay the loan, SAFT will work closely with SMMEs to ensure that repayment plans are in place which are sustainable for the business concerned.
