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A new survey by the South African SME Finance Association (SASFA) shows that despite the help offered by government and the private sector, only a fraction of businesses had any support. Only 47% of business owners applied for relief from government or financial institutions, because many did not believe they would qualify. Even amongst the 47% who did apply, only 32% were successful. This means that a mere 15% of SMEs with a turnover of below R10 million per annum, had any support.
To assist with the devastating impact Covid-19 has had on businesses across the country, Budget Insurance launched a relief fund for its business insurance customers with an annual turnover of less than R15 million. Those that qualified were given a relief package of R100 000 each, as well as business mentoring support.
“Our goal is to help SMEs survive the storm and emerge resilient to enable them to continue creating employment and contributing to South Africa’s economic reset,” says Alex Terblanche, Head of Budget Business Insurance.
‘This too shall pass’ is a phrase echoed by all 60 fund recipients. Despite the financial and emotional hardships they have had to endure, they all demonstrated an immense resilience and agility fuelled by the belief that there are better days ahead.
According to fund recipient Yvonne van Deventer, owner of bakery and restaurant, The Millery Clarens: “Lockdown restrictions caused a 50% drop in revenue and a backlog on our expenses. We had to unfortunately retrench some of our staff which was very sad because we pride ourselves in job creation for the local residents in the area. Although things are starting to slowly pick up, it really has been very difficult and challenging.”
Another fund recipient, Nicky Charles, owner of G2G Hair Studio said: “I had no income for about three months. We were the only shop in the mall that had to remain closed. The worst thing is that I had to let good people go for my business to survive.”
Primrose Bonisiwe Mdingi, owner of Disability Pride said: “On top of a loss in revenue, I incurred more debt as I had to buy costly PPE gear for all my staff. Although I am relieved that I did not have to retrench any of my dedicated staff, they have been affected by pay cuts.”
Pastor Devan Pillay from Truth and Life Ministry said. “We closed our doors on 26 March and only reopened them in the first week of June. Now, our services are limited to 50 people, where it used to be between 150 and 200. We rarely see more than 30 or 40 people in attendance. Receiving this funding means that we will be able to pay salaries and help those in our congregation who were also severely impacted by COVID-19-related job losses.”
For Sifiso Dlamini, owner of Bathathe Photography, lockdown has been devastating on his business and a deeply worrying time. “We lost out on so much work – weddings, corporate events, concerts – all were cancelled and the business was not generating a cent. With this funding we’ll be able to pay our running costs and upgrade our equipment for when everything returns to normal again.”
The Budget Insurance Relief Fund recipients have the following advice to assist other SMEs dealing with similar struggles:
The fund recipients will have access to an exclusive support programme by Enterpriseroom to assist with business acceleration, growth, new opportunities and sustainability. Enterpriseroom have the following advice for other SMEs: