Department to set up fund to help SA small businesses affected by coronavirus [Updated]

UPDATE (30 March 2020): The Department of Small Business Development on Saturday (28 March) said in a statement that it had published guidelines for application for the Debt Relief Finance Scheme and Business Growth and Resilience Facility.

It said the online application form for finance will be available from this Thursday (2 April). Only small businesses that are registered on the database on https://smmesa.gov.za/ will be considered, the department said.

South Africa’s Department of Small Business Development will launch a debt relief fund and business growth or resilience facility to assist small businesses that can prove that they have been affected by the coronavirus.

In an announcement yesterday the Small business minister Khumbudzo Ntshavheni (pictured above) said the department would provide relief on existing debts and repayments, to assist small businesses during the period of the coronavirus state of national disaster.

The coronavirus was declared a national disaster on Sunday by President Cyril Ramaphosa and will run for at least three months, but can be renewed.

Ntshavheni did not disclose the value of the total funding that would be available to small businesses through the two facilities.

Small businesses must demonstrate a direct link between the impact of the coronavirus on their operations to benefit from the debt relief fund

She said the debt relief fund would help small firms to buy raw materials and pay labour and other operational costs. The amount to be disbursed will be based on the funding needs of each business.

The business growth or resilience facility, would help small manufacturing firms, particularly those that supply various products that are in demand, emanating from the current shortages due to Covid-19 pandemic, she said.

“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,” she said.

To benefit from support, business owners must demonstrate a direct link between the impact or potential impact of the pandemic on their operations in order to be eligible for assistance, the department said.

Small businesses can register on the SMME South Africa portal at www.smmesa.gov.za, which will open this Tuesday (24 March).

Featured image: Small business minister Khumbudzo Ntshavheni (GovernmentZA via Flickr.com)