Government promises to help out small businesses hit by coronavirus
TIMESLIVE / 19 MARCH 2020 - 19.47 / ZINGISA MVUMVU
To qualify, you will have to prove a direct link between your inability to service your business loan and the coronavirus outbreak.
Are you a small-business owner whose business has been hard hit by the coronavirus and you are stressed about your business loans that must be repaid?
But to qualify, you will have to prove a direct link between your inability to service your business loan
and the coronavirus outbreak. Image: HOBERMAN COLLECTION/UIG VIA GETTY
Don't worry — it is not all doom and gloom. The SA government will service your debt.
This is the commitment made by small business development minister Khumbudzo Ntshavheni on Thursday.
But to qualify, you will have to prove a direct link between your inability to service your business loan and the coronavirus outbreak.
The funds will be coming from what Ntshavheni called the “Debt Relief Fund”.
Said Ntshavheni: “Government understands that SMMEs will be affected on two levels as businesses when the economy slows down and as suppliers of products and services during this period.
“To mitigate the impact during the expected economic slowdown, the department is finalising the SMME support intervention comprising of the Debt Relief Fund and Business Growth or Resilience Facility.
“The Debt Relief Fund is aimed at providing relief on existing debts and repayments, to assist SMMEs during the period of the Covid-19 state of disaster.
“For SMMEs to be eligible for assistance under the Debt Relief Fund, the applicant must demonstrate a direct link of the impact or potential impact of Covid-19 on the business operations.”
Over and above this intervention, Ntshavheni said she had instructed all provincial economic development MECs to assist in ensuring that as many small businesses as possible receive support.
But to stop chance takers who will see this as an opportunity to loot, the ministry has set up a centralised registration system (www.smmesa.gov.za) where all those in need of financial aid will register and be screened.
“The department’s insistence on the use of the SMMESA database is based on the need to track, monitor and strengthen the impact of business development support to SMMEs by both government and the private sector, during this period and beyond.
“In future, the database will also be used to apply for both financial and non-financial support, access information about business opportunities and market access support,” she said.
The Business Growth or Resilience Facility, said Ntshavheni, was meant to “enable continued participation of SMMEs in supply value-chains, in particular those who manufacture (locally) or supply various products that are in demand, emanating from the current shortages due to Covid-19 pandemic”.
“This facility will offer working capital, stock, bridging finance, order finance and equipment finance and the amount required will be based on the funding needs of the business.”
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER