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The Covid-19 pandemic, which has been declared a National Disaster and has prompted a 21-day national shut down, is having catastrophic effects on businesses throughout South Africa and around the globe.
Micro, small and medium enterprises are among the hardest hit by the crisis. Government departments have been inundated with enquiries from small firms, requesting help to mitigate the devastating impact the pandemic is having on their livelihoods.
The Minister of Small Business Development Khumbudzo Ntshavheni, announced that the SA government is introducing support measures for SMMEs during this extremely difficult time (see this story).
The department’s proposed Debt Relief Fund will offer qualifying small businesses much-needed repayment relief, which will assist many business owners who are currently finding their debts unserviceable.
Business owners who face cash flow challenges must make contact with their banks, suppliers and other creditors sooner rather than later
In order for small firms to qualify for assistance from the Fund, they will need to demonstrate a direct link of the impact, or potential impact, of Covid-19 on their businesses.
Assistance from banks
Some of the banks have also started announcing lifelines that they will be extending to their small business customers.
Standard Bank was first to the party, offering a three-month payment holiday for debt repayments for qualifying business customers with an annual turnover of less than R20-million.
Furthermore, the bank recently made a statement on Twitter, committing to reach out to their vehicle and home loan customers individually with payment relief options.
Nedbank are encouraging their customers to get in touch with them directly. They will be offering solutions including debt repayment holidays, extended loan periods, or short-term credit extensions on a case-by-case basis. They will make further announcements regarding their relief offerings in the coming days.
Now, more than ever, it is the performance of the small business sector that will determine the fate of the country’s economy going forward.
With a severely constrained fiscus and looming mass retrenchments by corporates, it is critical that the small business sector is strongly supported through this crisis.
Business owners who are facing cash flow challenges, to make contact with their banks, suppliers and other creditors sooner rather than later.
In this time of uncertainty, it is important that business owners take immediate steps to ensure they have the cash-flow reserves needed for the months ahead.
Ironically, the best time to apply for finance is when it is least needed, when business is booming. This is when lenders are more likely to approve credit facilities that are then available to the business owner for these kinds of unplanned crises.
Of course, if you haven’t already secured the money you need to bridge you through this tough time, then the next best time to apply for finance is now, before you hit the cash cliff.
Finfind has a database of over 600 small business finance offerings. Business owners can complete Finfind’s online questionnaire which will match them with finance offerings.
*Darlene Menzies is the CEO and founder of FinFind.