Last week, National Treasury announced that it had provided a guarantee of R100 billion to banks to provide additional funding for small businesses.
This will be increased to R200 billion if necessary and if the scheme is successful.
Funeka Montjane, chief executive of personal and business banking at Standard Bank, says: “This guaranteed loan scheme will bolster efforts made in both the private sector and government to aid small business.
"We have been in constant consultation with government about the implementation of the scheme and are now ready to receive applications.”
This is over and above the existing measures, including funding from the small business development department and the SA Future Trust Fund, as well as debt-relief holidays.
Loans will be made available to business customers with an annual turnover of less than R300 million.
The loans, which will cover up to three months of operational costs, may only be used for a business’ operational expenses, such as salaries, rent, lease agreements and contracts with suppliers.
The business must be registered with the SA Revenue Service (Sars).
The loan is only for businesses that were in good standing with the bank as at February 29 2020, and that have been negatively affected by the lockdown related to the Covid-19 coronavirus pandemic.
The loan attracts an interest rate of prime and must be repaid over a five-year period.
Sandra Beswick, a business rescue expert at Fluence Capital, warns that small businesses should only take out loans if they have a plan of what to do with the funds.
“Don’t just take on additional debt because it is available. These often require personal surety and, in some cases, banks are even insisting on personal guarantees that the loans are protected from business rescue.”
FNB provides grants to micro entrepreneurs
FNB has committed R8 million in grant funding to enable micro entrepreneurs to resume work during and after the Covid-19 pandemic.
The bank has partnered with the Supplier Development Initiatives – a services-on-demand platform that aggregates platforms to uplift micro suppliers by giving them access to the market, in effect allowing micro suppliers to do business with large corporates – to assist more than 2 170 entrepreneurs who provide access to their services through Uber, Bolt, SweepSouth, Loadit, WastePreneurs and Tradeway.
The grant funding will be used to enable micro entrepreneurs to repurpose and acquire assets as well as personal protective equipment to enable them to deliver services in a safe manner in the current environment.
The aim is to get micro entrepreneurs back to work as soon as possible to reduce the support that would otherwise be required from relief programmes to sustain their livelihoods and that of their families.
Many have no source of income currently, yet could play a significant role in assisting the private and public sector through the provision of their services.
Heather Lowe, head of small and medium-sized enterprise development at FNB Business, says: “SweepSouth is a perfect example where, owing to an inability to get back to work until a lower lockdown level, the women are not generating an income, with many of them being sole breadwinners and single mothers.
“Currently, they are forced to rely on relief programmes to provide for their families.
"They can play a meaningful role in the provision of cleaning and sterilising of office buildings and public areas at scale if provided with the means to do so safely and effectively, and, most importantly, if they are visible to the sectors that are procuring these services.”
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