A shocking picture of what it’s like to be a small business owner in South Africa right now

 ·6 May 2020

Findings from a new poll by the National Small Business Chamber (NSBC) highlights the continued pain experienced by small businesses coming out of level-5 of the lockdown in South Africa.

The Covid-19 National Small Business Survey canvassed thousands of small businesses throughout the country, providing insights into the catastrophic effects of the level-5 lockdown period as a result of the Covid-19 pandemic.

President Cyril Ramaphosa first instituted a total lockdown (level 5) on 26 March, which was extended to the end of April. The country then moved to level 4 on 1 May, meaning a slightly relaxed form of lockdown.

The deep challenges are expected to worsen until lockdown reaches level-2 and level-1, when most small businesses will get back to some form of normality, the chamber said.

“One of the disturbing challenges facing small businesses is the inability for small businesses to access relief-funding.

“The survey revealed that of the 53% of small businesses that applied for relief-funding, only 6% of the applicants received funding. Reasons cited for this range from poor or no-response, unnecessary qualifying criteria and lengthy tedious processes,” said Mike Anderson, founder & chief executive officer of NSBC.

He said that 94% of small businesses stated that they are either now in a cash- flow crisis or will be within the next 30 days.

“Government urgently needs to remove all the red-tape and speed up the relief-funding processes and make this funding available to all small businesses throughout the nation.”

Anderson said that further disturbing insights into the survey reveals that 63% of small businesses have already and expect to lay-off workers within the next 30 days. Only 8.5% of small businesses are back to normal at level-4 and more than 75% will only be back to normal at level-2 and level-1, the most being at level-1.

A summary of the Covid-19 National Small Business Survey:

  • Only 8.5% are back to normal at level-4;
  • 75% will only be back to business at level-2 and level-1;
  • 53% applied for relief-funding;
  • 6% who applied for relief-funding were successful;
  • 94% are either in a cash-flow crisis situation or will be within the next few weeks;
  • 63% have laid-off their workforce or expect to do so within the next few weeks;
  • 79% expect not to survive the pandemic or are unsure;
  • 53% state that government is not communicating effectively with regards to lockdown regulations and restrictions;
  • 57% are confused as to what their businesses can or can’t do during lockdown levels.

“Our plea to government is to communicate more effectively, eliminate all confusion and bring detailed clarity of how and when small businesses can get back to business. Importantly, fine-tune and speed up the relief funding processes and make this funding available to all small businesses through the nation,” said Anderson.

Read: A call to help South Africa’s 525,000 small businesses

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