Lockdowns around the world have left small business owners shook. Is there relief funding? Where do you fit in? What are your options? Here are 7 things you need to know as a small business owner during the COVID-19 lockdown in SA.
1. There is relief funding, but…
So yes, there is relief funding for small businesses during COVID-19 in SA, including grants and loans. But what kind of schemes are they and does the government really have your back?
The Department of Small Business Development has launched a Debt Relief Fund. This fund exists to help small, medium and macro enterprises (SMMEs) who are struggling due to the COVID-19 pandemic. They announced a number of interventions, including:
- Debt Relief Financing Scheme
- Business Growth Resilience Facility
- SMME Relief Finance Schemes
- Restructuring of SEFA-funded loans
- Informal Sector address (including spaza shop funding)
There is also Tourism Relief Funding and the COVID-19 Disaster UIF Funding, IOL reports. Sufficed to say, the state has provided some funding platforms. BUT…
2. The self-employed are not covered
While there is the opportunity for debt relief for small, medium and macro enterprises, including spaza shops, Daily Maverick reports that there are limitations: ‘It was made clear right at the start that hawkers and the self-employed would not be covered”.
So, in that sense, not all small business owners have access to this funding.
3. Neither are non-South Africans
If you are not a South African citizen, you don’t qualify for these funds. When the government offers support such as the SMME Debt Relief Scheme, this is what they mean: the company must be 100% owned by South African citizens.
Sadly, this means that there is no funding for foreign-owned businesses, even if those companies employ South Africans. And there are many. So this will no doubt result in some severe losses.
4. There’s a LOT of red tape
The paperwork can be a bit overwhelming. Here are some of the things you need to apply for the Small Business Debt Relief Scheme:
- certified copies of the directors’ IDs
- last 3-6 months of bank statements
- latest annual financial statements
Most funding platforms also require businesses to be:
- tax compliant
- UIF compliant
- have financial projections
The reality, of course, is that many small businesses simply don’t have all this documentation in order. Here, it’s also worth noting that the application forms are not available in all the official SA languages. An oversight for sure.
The funding requirements are often ambiguous, IOL reports, and many entrepreneurs misinterpret the loans as grants. So, pay careful attention to the terms.
The waiting period between application and receiving the funds may also be too long for small businesses who are really feeling the pinch (ideally though, it should be seven days).
5. There have been over 80 000 applications
So – not to spell it out – but the demand is massive and the funding won’t stretch far enough to benefit everyone. With all these businesses applying for funding, across SA, it stands to reason that some will get the money they need to survive, IOL reports. But many won’t.
6. Wtf is the Solidarity Fund and can I get some?
The Solidarity Response Fund is a dope idea. It’s based on the premise that big businesses show up and help small businesses during the COVID-19 lockdown.
The Oppenheimers and Patrice Motsepe have donated R1 billion each towards the fund. Naspers has given half a mil. Furthermore, individuals and businesses who have the means are urged to do the same. Btw, you can do so here: contact email@example.com for more info.
Johann Rupert pledged R1 billion to the Sukuma Relief Programme. However, this fund got over 10 000 applications in just three days. So now it’s now closed. But, it might reopen, as the plan is for it to continue after lockdown.
So, keep an eye out for this: if the applications reopen, they’ll be here online. Who can apply? Formal sole proprietors, close corporations, companies and trusts.
7. Here are some helpful links
If you’re going through the most rn, you may not have the energy to scour the internet. We got you.
There are different packages targeted at different demos, Yoco explains this in-depth (totally worth the read). For example, the Youth Business Relief fund is here for the young entrepreneurs struggling with rent and labour costs: you can apply here.
The tourism industry has its own offerings too in the COVID-19 Tourism Relief Fund, you can apply here. And, finally, here’s a summary of all the COVID-19 relief funding plans, what they require, how to apply, and where you fit in.
If you’re a small business in the COVID-19 lockdown, I hope this helps. And if you’re a consumer, please SUPPORT LOCAL BUSINESS, yes even now.
Go online and see if they’ve adjusted their offerings. Or call, book a service, order a product – and pay in advance. Get an IOU. Do the things.