Small business calls for 'bold support' amid devastating virus impact | Fin24
 
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Small business calls for 'bold support' amid devastating virus impact

Mar 23 2020 19:45
Khulekani Magubane

The coronavirus outbreak has had a "widespread" impact on small businesses in South Africa and Small, Medium and Micro Enterprises (SMMEs) need urgent assistance on multiple fronts. 

This is according to Property Point founder Shawn Theunissen, who said in a statement on Monday that discussions with over 250 businesses across the country had revealed four key struggles that had become pronounced in recent weeks. 

These are cash flow constraints from delayed payments, halting work as construction shuts down, increased costs from hygiene and safety precautions, shorter hours leading to lower productivity, and declining sales. 

As of Monday, South Africa had an increase of 128 confirmed cases of Covid-19, bringing the tally up to 402. President Cyril Ramaphosa has, in the meantime, announced multiple measures to support businesses vulnerable to the coronavirus. 

On Monday evening, he said the state was working on a special dispensation for companies in distress because of the coronavirus. Under this proposal employees could receive wages via a temporary employee relief scheme to let companies pay employees directly.

Tax compliant-businesses with a turnover of less than R50 million would be allowed to delay 20% of their PAYE liabilities and a portion of their provisional corporate income tax payments over six months, while the Industrial Development Corporation has put together a package of R3 billion to assist vulnerable companies. 

Earlier on Monday, Theunissen asked banks that extended credit to SMMEs to play a role in softening the blow that the outbreak would deal on them.

"We also would like to see banks and financial institutions responding accordingly so that as a result, most small businesses that need credit during these uncertain times will be able to obtain it," said Theunissen.

Theunissen said more detail was required on the Department of Small Business Development's announcement of assistance for small businesses, before it could be appropriately assessed and stress-tested with the realities of the SMMEs on the ground.

He added that a high level of public and private sector coordination was required to ensure vital economic support to SMMEs to overcome the short-term loss of revenue they were experiencing.

As examples, Theunissen cited the United States' $300 billion relief package for small business, Nigeria's $136 million fund to help small and medium businesses, Malaysia's $453 million package of loans and Indonesia package of loans of up to $655 000 for SMEs.

south africa  |  currencies  |  smmes  |  rand  |  markets
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