The coronavirus pandemic is affecting small businesses in a variety of ways. From loss of business to remote work, things are changing fast during the COVID-19 outbreak and businesses are being forced to adapt. we are working to bring you the best resources and information to help you navigate this challenging time.
The coronavirus is causing financial difficulties for businesses across the world. Here are five resources that can help you navigate this difficult situation.
COVID-19 has brought the world’s economy to a grinding halt. The economic impact and recovery will last for months, and potentially even years. As government authorities move to save different areas of the economy, it’s important to understand what resources you have available to you as a small business owner.
Everyone’s first priority during this pandemic should be to stay safe and healthy — but maintaining your business’s health can be equally important. Take advantage of the following resources so you can stay informed and lessen the impact of the crisis.
Government to provide relief for struggling small businesses
A Debt Relief Fund to help alleviate the economic impact of the coronavirus on small businesses in South Africa is due to come into operation on Tuesday 24 March 2020.
All small, micro and medium enterprises (SMMEs) may apply for relief on existing debts and payments. In order to be eligible, all applicants will be required to show an impact, or potential impact, of the virus on their business.
“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 SMME’s cash flows, as well as the extent of the impact suffered,” the Minister for Small Business Development, Khumbudzo Ntshavheni, said.
“As the nation grapples with the impact of the Covid-19 pandemic, the department will be guided by the National Command Council in determining the sectors that are deemed severely impacted in order to qualify for the Debt Relief Fund.”
Fund operated by the Department of Small Business Development
The fund is being established and administered by the Department of Small Business Development. According to the department, it has been “inundated” by enquiries from SMMEs about measures that could help them mitigate the enormous impact being felt by their businesses.
Organisations wanting to apply for assistance from the Debt Relief Fund must register on the SMME South Africa portal at www.smmesa.gov.za so that a database can be created. The portal will become operational on Tuesday 24 March 2020.
“The department’s insistence on the use of the database is based on the need to track, monitor and strengthen the impact of business development support to SMMEs by both government and the private sector, during this period and beyond,” Ntshavheni said.
“In future, the database will also be used to apply for both financial and non-financial support, access information about business opportunities and market access support,” she added.
Business Growth/Resilience Facility is second SMME assistance initiative
A second SMME assistance initiative by the Department of Small Business Development is the Business Growth/Resilience Facility. This has been specifically created to enable continued participation of SMMEs in supply value-chains – particularly those small businesses which manufacture locally 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 provided will be based on the funding needs of the business, Ntshavheni said.
Applicants for the Business Growth/Resilience Facility should also register at www.smmesa.gov.za from Tuesday
Governments around the world are working to assist their SMMEs
Governments around the world have been scrambling to assist SMMEs as the economic implications of the coronavirus pandemic become evident.
In the United States, for example, the US Small Business Administration (SBA) has increased its funding pool from US$20-billion to US$50-billion in response to the virus.
It is currently offering low-interest disaster loans of up to US$2-million for small businesses suffering losses due to the coronavirus. These loans can be used to pay debts and cover payroll and other bills.
In the UK, government-backed business loans will be interest-free for 12 months and certain tax payments, including VAT, have been deferred.
In addition small businesses, charities and NGOs can apply for up to 80% of employees’ wages to be paid from government funds as part of a job retention scheme.
In France, approximately 600 000 small businesses and self-employed people can apply for €1 500 in financial compensation if they can prove the impact of Covid-19 on their business.
Private enterprise is also becoming active in assisting small businesses
Private enterprise has also become involved in assisting small businesses.
Facebook, for example, Facebook announced a US$100-million grant for small businesses impacted by the virus and launched the Business Resource Hub, which features recommendations to help small businesses stay connected to customers and stay on track.
US bank JPMorgan has pledged US$50-million to help struggling customers and US$8-million in aid to small businesses, specifically.
Amazon has created a US$5-million Neighbourhood Small Business Relief Fund to provide cash grants to small businesses in the US city of Seattle, where it is based.