Businesses stress about relief cash as ‘chancers’ try their luck

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Businesses stress about relief cash as ‘chancers’ try their luck

Funding and debt-relief options flooded with applications by lockdown-battered companies

Orrin Singh and Nivashni Nair
Image: 123RF/alphaspirit

Anxious business owners are likely to hear this week if their relief funding applications have been approved, as fund managers sift through a deluge of applications and warn that “chancers” will not be tolerated.

KwaZulu-Natal businessman Tony Perumal, 32, who provides a range of industrial and construction services and employs about 60 people, made an application to the R1bn Sukuma Relief Programme – started by Johann Rupert and Remgro – a day after it went live for applications, but hasn’t had feedback.

With only a few funding and debt-relief options, thousands have inundated the government, banks and private funds to assist small, medium and emerging entrepreneurs (SMMEs).

Last Monday, the R1bn Sukuma Relief Programme, which was established as a lifeline for these businesses, was closed temporarily after receiving R2.8bn in applications. This came in the form of more than 10,000 applications made by desperate business owners who have to pay rent, inventory and product bills, and salaries of employees.  

“I logged on to their website and made an application but I did not receive a reference number. When I attempted to reapply on Monday, applications had been temporarily closed,” Perumal said.

 We had one guy apply for R1m funding, but did not meet the criteria and was rejected. He then made four different applications of R250,000 – but he still didn’t meet the criteria.
Business Partners staffer

His business, like tens of thousands across the country, has ground to a halt after the national lockdown began on March 27, and he says he is sick with worry about his workers who are struggling to buy food without a job during the lockdown.

Similarly, for Johannesburg businesswoman and single mother of four Felicia Ntisa, 50, relief funding would allow her to continue to pay her 42 staff.

Ntisa, a franchisee of three health, beauty and hair companies in the Bryanston and Hyde Park areas, said she had received no income since the lockdown began.

Ntisa applied for funding, through her bank, from the Sukuma Relief Programme and the South African Trust Fund (SAFT) (an independent trust set up by Nicky and Jonathan Oppenheimer with an initial contribution of R1bn) and was hopeful she would get approved.

“The process is easy and quick. I received acknowledgment of my application and a call. I am still waiting for final approval. This funding will be for my employees. It will be a big relief; most importantly it will ensure that at least my employees will have something during this period, albeit something small.”

Department of small business and development spokesperson Priscilla Monama told Times Select the response to measures of support had been “overwhelming”.

“To just demonstrate the extent of the need, by Tuesday, (April 7), over 100,000 SMMEs had registered on https://smmesa.gov.za/ to express their need for assistance. The registration process is a process of verification and cross-checking the information provided against other government entities.”

Monama said applications went live on April 3 and they had so far received 15,000 applications for the SMME Debt Relief Scheme, and 4,000 for the Business Growth and Resilience facility.

“We have announced seven working days to process applications from the date of receipt of all supporting documentation and will begin to announce successful applications early this week.”

An employee at Business Partners, the company tasked with administering funds for the Sukuma Relief Programme, told Times Select there were many “chancers”.

 “We had one guy apply for R1m funding, but did not meet the criteria and was rejected. He then made four different applications of R250,000 – but he still didn’t meet the criteria.

 “Under normal circumstances I would take a week to process an application of this kind, but I am processing anything between three and four applications a day.”

BY THE NUMBERS

1,000: requests per hour from individual and business banking customers on FNB’s online channels during the first week of the lockdown;

R2.8bn: value of the applications made to the R1bn Sukuma Relief Fund in three days.

FNB’s provisional analysis revealed that about 50,000 customers who applied in the past two weeks may qualify for relief.

Hotelier Bridget Hilton-Barber was not one of those customers when she took to social media to express her disgust that her business, the Kings Walden Garden Manor, had been denied an overdraft extension and debt holiday, despite being a loyal client for 10 years.

Hilton-Barber said FNB contacted her to remedy the situation but she learnt that the bank didn’t give debt payment holidays on overdraft facilities.

She was then advised to apply to access funds from the South African Future Trust (Saft) fund through the bank.