A helicopter with a water bucket helps to extinguish fires that ripped through the coastal town of Knysna last month, resulting in
several fatalities, destroying homes and forcing the evacuation of up to 10 000 people. Photo: Halden Krog / AP
A call has been made by a financial firm to assist small businesses in Knysna following South Africa’s biggest natural disaster last month.

According to Retail Capital, a company that provides working capital to small businesses, the outlook for those who were uninsured and are poor was uncertain, with nearly 10000 residents evacuated and homes, schools, structures, power and communication lines destroyed. Damage is estimated at more than R4billion,

The firm sent a team to the fire-ravaged seaside town last week to speak to business owners across various industries, including retail, hospitality, automotive and building, and has provided statistics.

It showed that between 38percent and 50percent of local consumers were not insured, leading to cash-flow issues, with many forced to take money from their businesses to fund home repairs.

The evacuation and displacement of 10000 residents have led to lower expenditure in stock by the retail and hospitality sectors, both needing to be prepared for the Knysna Oyster Festival that is under way and the year-end holiday rush.

The stats also showed that secondary damage from smoke or water had limited or eliminated trading, while businesses that were insured have to wait for assessments.

This had led to low or zero turnover as owners were unable to procure, order or pay for orders that are essential for high-season preparations.

The fires also led to 2500 jobs being lost, mostly in the hospitality and domestic sectors, putting further strain on the local economy.

In addition, water shortages because of the drought and spraying of fires had put pressure on tourism - the “lifeblood of the town”.

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The Western Cape government said about 30 tourism establishments had been affected by the fires, resulting in the subsequent loss of 300 to 400 beds, with only 4000 available, which has had a negative impact on the economy.

The stats also showed that the boost in the construction industry, due to rebuilding of more than 700 homes and repairs to many more, had put pressure on businesses needing emergency cash flow to fund the need for stock and the short-term increase in the services of artisans such as plumbers, electricians, builders and bricklayers.

Karl Westvig, chief executive of Retail Capital, said many small businesses were in desperate need of short-term funding to bridge their initial cash-flow shortages and assistance with rebuilding the economy.

BUSINESS REPORT