The COVID-19 pandemic presents major challenges for many South African businesses.
The spread of the virus has disrupted supply chains and delayed payments by debtors, and various parties now battle to meet their contractual obligations.
The virus has also influenced employees in both financial and psychological respects.
Moreover, the COVID-19 crisis has shown the importance of businesses offering proper digital payment solutions to their customers.
No business will be exempt from these challenges.
Nedbank Business Banking has undertaken several initiatives to support its clients to make sure that they can meet the challenges stemming from COVID-19 head-on.
Businesses are faced with the risk of not being able to repay their contractual loans monthly. They are under short-term cashflow pressure – their income is compromised as their debtors are delaying payments.
Nedbank Business Banking works with companies to review the impact of the pandemic on their cashflow.
The bank has a range of short-term working capital solutions and flexible repayment options to alleviate cashflow pressures.
These include the following:
- Short-term overdrafts (for contractual obligations).
- Bridging working capital finance (for short-term cashflow constraints).
- Deferring loan payments (payment holidays) and restructuring.
- Financial assistance through the COVID-19 SME Relief Fund Loan Scheme (in partnership with the South African Reserve Bank and National Treasury).
Demand for digital solutions
As COVID-19 restrictions have inhibited customers’ abilities to interact with businesses physically, the necessity of effective digital payment solutions has become evident.
Nedbank offers a range of remote, digital and mobile payment solutions, making sure that businesses can continue operating effectively.
This includes e-commerce solutions to help businesses with online ordering capability as well as an offering that allows clients to get a deep understanding of their customers’ buying patterns and other valuable information.
Nedbank’s analytical tools include the following:
- Market data services – enabling businesses to view the aggregated transactional payment history of their customers to improve marketing effectiveness.
- Accounting services – integrated accounting software with online banking.
- Notification services – a service informing businesses of transactional activity.
- Fleet management solutions – an end-to-end fleet management solution enhancing fleet operations.
- E-statement and e-messenger services – digitised bank statements and electronic notification of transactional payments and collections.
Many local businesses are exposed to global markets and may be extremely dependent on income from exports.
With the challenge of demand being severely constrained, coupled with rand volatility, a mismatch in meeting forward cover contracts will create cashflow pressure.
The inability to receive export proceeds, or a delay of that, can put any business in a position where it cannot use forward exchange contracts, with the added risk of not being able to fund the negative cashflow differences on unwinding forward exchange contracts.
Likewise, the cashflow of importers will also be under pressure as a result of the disruptions in supply globally.
Nedbank Business Banking has solutions to alleviate cashflow pressures through temporary short-term overdrafts or the extension of import facilities.
Get help today
Current Nedbank Business Banking clients can contact their business manager about these initiatives.
To qualify for Nedbank Business Banking a company must have an annual turnover of between R10 million and R750 million.
This article was published in partnership with Nedbank.