South Africa’s coronavirus debt relief fund for businesses is now live – here’s how it works
BUSINESS TECH / 24 MARCH 2020 - 19.11 / STAFF REPORTER
President Cyril Ramaphosa has announced a three-week lock-down with severe restrictions on travel and movement. To assist businesses during this difficult time, the Department of Small Business Development has launched a debt relief fund to help mitigate the impact of the economic shutdown caused by the coronavirus on small, micro and medium enterprises (SMMEs).
The fund is aimed at providing relief on existing debts and repayments, said Small Business minister Khumbudzo Ntshavheni.
“For SMMEs to be eligible for assistance under the debt relief fund, the applicant must demonstrate the direct link of the impact or the potential impact of Covid-19 on business operations,” Ntshavheni said.
“This facility will also assist entities to acquire raw material, pay labour and operational costs. All these interventions will be structured to match the patterns of the SMMEs cash flows, as well as the extent of the impact suffered.”
To qualify for access to the fund, businesses will be required to register on the SMME South Africa platform here.
Some of the details which companies are required to share include:
Shareholders (including current BEE standing);
Number of employees;
In future, the database will also be used to apply for both financial and non-financial support, access information about business opportunities, and access market opportunities, Ntshavheni said.
Alongside the new fund, Ntshavheni said her department will also launch a ‘Business Growth/Resilience facility’ which has been specifically created to enable continued participation of SMMEs in supply value-chains – particularly those which manufacture or supply items which are in demand due to the 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, Ntshavheni said.
President Ramaphosa said the government will put measures in place to assist local businesses which will be negatively affected by the restrictions implemented during the lockdown.
Money will be spent to save lives and to help businesses survive, and Ramaphosa noted that the Rupert and Oppenheimer families have each donated R1 billion to the cause.
“We call on large business in particular to take care of their employees,” the president said.
R200 million will also be made available to small and medium businesses in the tourism sector who have been hit hard by travel restrictions, he said.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER