South Africa’s Department of Small Business Development is to establish a Debt Relief Fund to assist small businesses from any economic ramifications of the COVID-19 crisis.
The South African government has implemented various measures in order to slow the spread of COVID-19, also known as Coronavirus, many of which could negatively impact small businesses in the country.
With this in mind, the Department of Small Business Development has announced it will launch a Debt Relief Fund to provide certain businesses with relief on existing debts and repayments should the economy slow.
Minister Khumbudzo Ntshavheni said in a statement that the department had been “inundated” with queries from small businesses about mitigating the financial impact of the virus on their businesses, and needed to act.
“Government understands that SMMEs will be affected on two levels as businesses when the economy slows down and as suppliers of products and services during this period,” she said.
“The Debt Relief Fund is aimed at providing relief on existing debts and repayments, to assist SMMEs during the period of the Covid-19 State of Disaster.”
The facility, the value of which is undisclosed, will offer working capital, stock, bridging finance, order finance and equipment finance, with amounts provided based on the needs of each business.
“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,” Ntshavheni said.
For SMMEs to be eligible for assistance under the Debt Relief Fund. the applicant must demonstrate a direct link of the impact or potential impact of COVID-19 on business operations.
A registration portal will go live on the SMME South Africa portal on Tuesday, March 24.
Meanwhile, the declaration of the national disaster came at a time when the department was undertaking the Pitch-for-Funding initiative, introduced in an effort to improve access to funding and business development support for SMMEs and entrepreneurs, especially those in rural areas and townships.
These sessions were scheduled to take place across the country, with some having already taken place in Limpopo, Northern Cape and KwaZulu-Natal. Ntshavheni said the department would announce its plans for taking the Pitch-For-Funding initiative forward whilst observing the regulations of the national state of disaster in the next few days.