Details on how South African businesses can be assisted by the R1 billion Johann Rupert pledged to fight the impact of the coronavirus outbreak have been released.
The coronavirus pandemic has caused tremendous uncertainty in the business world, especially for small-and-medium enterprises (SMEs), which face a tough future.
South Africa’s poor economic growth and problems with electricity supply have made it particularly difficult for these small businesses.
It is for these reasons that Rupert created a R1-billion fund to help SMEs during the coronavirus lockdown.
Business Partners, one of Africa’s leading risk finance companies for SMEs, will administer the R1 billion funding from the Rupert family and Remgro.
Business Partners MD Ben Bierman said they have been working to put guidelines and systems in place to ensure the funding reaches businesses that need it most.
“We will have distinct and separate financing programmes available for both sole proprietors and formalised SMEs to ensure widespread support,” said Bierman.
“We expect to make an announcement regarding the criteria, repayment terms, and how to apply for the finance this week.”
He said this funding can go a long way to help sustain many of the affected businesses and to protect jobs for years to come.
Business Partners MD Ben Bierman explains
Speaking to CNBC Africa, Bierman explained they will create a platform for small businesses to apply for funding.
There will be several steps which businesses will have to go through to help Business Partners verify the existence and viability of the small business.
He said these details will be announced before the end of the week, when the platform is set to go live.
Bierman highlighted that the funding is available to all South African businesses.
The funding will be made available to smaller businesses in the form of a grant, which means there will be no repayment obligations.
For larger businesses, there will be be a loan component which will have to be repaid at some point in future.
The initial interest-free period, where no repayment has to be made, will be one year. Bierman said they hope the major impact of the coronavirus outbreak would have subsided by then.
“Hopefully by that time businesses will return to cash flow positive and profitability, which will make it possible for them to repay some of the money,” he said.
Bierman made it clear that the R1-billion pledge by the Rupert family is a donation, and that none of the money will go back to the family.