Funding Update

SME Loan Scheme

President Ramaphosa announced on Thursday night 23 July 2020 that some requirements to obtain access to the SME’s loan scheme have been relaxed. This scheme is part of the R200 billion that has been allocated to assist SME’s.

The following was confirmed by our bank managers:
– The loan amount is now linked to 6 months qualifying business expenses (previously 3 months)
– Waiting period for first repayment instalments is extended to 12 months (previously 6 months)
– Applicant to be in good standing with creditors and banks as at 31 December 2019 (previously 29 February 2020)
– Turnover cap removed (previously R300 million per annum)

These loans are administered by the banks and you should contact your bank manager for the application documents and process. Please contact us if you need assistance with the completion of the application documents and preparation of supporting documents.

Business Distressed

There is no planning model or tool out there that could have helped us plan for a pandemic. We are all in this season and there is not one organization which has not been impacted. This season does however highlight those areas where the business was not healthy and where we might have made not such good decisions.

It is a time to ask those very hard questions to enable you to position your business for the future. Herewith some considerations to determine why a business is in distress:

1. Business models not feasible (designed for failure)

2. Business cannot sustain the owner’s lifestyle (personal drawings is too high)

3. Respond to changing market too slowly (opportunities / threats)

4. Technically competent, but not financially

5. Insufficient back-office (record keeping, accounting records and reports)

6. Cash flow management (spending wrong time, on wrong stuff)

7. External risk-management (pandemics)

Final Thought

We will continue to monitor the latest developments and provide you, our client, with updates. We are your business partner and together we will get through this.

Take care of yourself, your family and staff.

Yours in business

Frank Fourie