Small Enterprise Development Agency comes to aid of small businesses affected by unrest
The package offers blended finance which is a combination of a grant (60%) and loan (40%) with the interest rate on the loan capped at 5%.
Small businesses in KwaZulu-Natal (KZN) and Gauteng that have been impacted by the unrest may be eligible for relief from the Small Enterprise Finance Agency (SEFA).
The true cost of last month’s unrest continues to be felt as small businesses across the country try to deal with their losses.
According to the South African Property Owners Association (SAPOA) and Business Leadership South Africa (BLSA), the estimated cost of the unrest reaches into the tens of billions.
Current estimates say that R1.5 billion in stock has been lost and R15 billion in property and equipment has been damaged.
More than 800 retail stores were looted and 100 were completely burnt, with an impact on about 50 000 informal traders and 40 000 businesses.
To date, 150 000 jobs are reported to be at risk countrywide.
As a result, a business recovery and support package has been prepared by government and will be administered via SEFA.
It focuses on uninsured small enterprises which require funding for working capital which includes stock, equipment, delivery vehicles, furniture and fittings.
The package offers blended finance which is a combination of a grant (60%) and loan (40%) with the interest rate on the loan capped at 5%.
There is an initial payment moratorium of up to 6 months with a maximum repayment period of 5 years.
The maximum funding offered is R2 million.
The Small Enterprise Development Agency (SEDA) will offer help in filing applications while offering business support following the investment.
Businesses are only eligible if they have been negatively affected by July’s unrest, are registered as a CIPC, have been in operation as at June 30 and are completely owned by South African citizens.
They will also need to be Sars compliant, registered on the national SMME database and able to provide an affidavit confirming that the business is not insured.
Priority will be given to KZN and Gauteng based businesses.
The following types of business are excluded from the package: Labour brokers, ammunition manufacturers and traders, tobacco, liquor, gambling, sex traders, NPOs, political organisations, speculative property developers and businesses currently under debt review.
Applications must be submitted to BRP@sefa.org.za.
The application form can be found at www.sefa.org.za/Content/Docs/brp.pdf.
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