While the Western Cape government has provided funding worth R38million to more than 250 struggling small businesses, the lifeline has been described as a drop in the ocean in comparison to the need.
A report into how Small, Medium and Micro Enterprises (SMMEs) fared in 2020 drew a troubling picture for the financial health of many of these businesses who are battling to remain open.
And of the 1 489 businesses surveyed, around 43% of those that closed applied for relief funding and 99% of those applications were turned down.
Many of these businesses reported the inability to access funding as the biggest challenge they faced, followed by struggling to pay salaries.
The report showed in the first five months of the lockdown, more 500 permanent jobs and another 411 part time jobs were lost in the Western Cape.
In September the Western Cape government announced its Covid-19 relief fund for small businesses, which has since provided funding to just over 250 businesses which saved up to 2 000 jobs.
A response to a written question from Good party’s Brett Herron on how many businesses benefited from the fund showed more than 70% of applicants were denied due to not meeting the required criteria. As many as 1 720 applications were received for funding and more than 1 400 were denied.
Of the approved businesses, 104 were black owned and 102 women owned. Altogether 165 were in the Cape Town metro.
Spokesperson for the Black Business Federation, Sifiso Shezi, said the majority of small to medium sized business owners struggled with accessing the relief funds made available.
“As a business owner myself, I made applications for funding and I never even got a simple e-mail that acknowledged receipt of the application, never mind feedback about the status of that application.
“And that is the reality of many owners who have struggled over the last months to access any form of funds just to stay afloat and we could not approach the banks because we are considered high risk.
“This meant many small business owners had to close their businesses which saw a lot of people lose their jobs as well. Moving forward for this new year the government needs to get serious about empowering small businesses in not just continuing to operate but help those who have closed and are seeking means to reopen.”
Last week, MEC for Economic Development, David Maynier, visited some businesses who were recipients of the funding. He said the fund was one of the ways the provincial government worked to support small businesses during the pandemic.
“We know that times have been tough for businesses during the Covid-19 pandemic, and that is why, from the start, we have been working hard to support businesses, especially small businesses, to open safely and responsibly, so we can save jobs and save the economy in the Western Cape.”
But for Kraaifontein resident, Khanyisile Mokoyo, 43, whose catering business closed last year, the stringent requirements ruled out a lot of businesses in need of financial help.
“We tried to apply for funding, but we never heard anything back. We ended up trying to run the business from my house, but even that did not work out. And once I had depleted my savings and tried to apply for a personal loan and couldn’t get that, my husband sat me down and convinced me to close down.
“I don’t know if I will be able to restart the business this year. I was optimistic towards the end of last year, but then with the second wave and this ongoing lockdown, it is hard to know for sure.”