The next few weeks and months are going to prove incredibly difficult for many businesses to navigate.
Sadly, in South Africa and around the world, there will be closures and job losses, despite the numerous programmes and relief funds that are available.
Here’s a comprehensive list of the funds and relief measures available to help South African businesses during lockdown, before we carry on.
Anybody who has tried to apply for the above knows that there are quite a few hoops to jump through, which is certainly not the case in Switzerland.
To illustrate the stark difference between the Swiss loan process and the UK loan process, here’s FT:
It took Matthias Knauer only a minute or two to complete and scan the single-page form for a liquidity lifeline from the Swiss government. About 30 minutes after sending it, the money was in his company’s account.
The comparison with his computer hardware support company’s UK subsidiary, based in the North Yorkshire town of Ilkley, could not be starker. Mr Knauer has 80 staff in Ilkley and is the town’s second-biggest employer.
After days of confusing phone calls to UK authorities, the company’s application for an emergency loan, part of a multibillion pound package of funding pledged by the government to support small businesses during the coronavirus pandemic, was denied.
A single-page form that took just a few minutes to fill in. I dare you to ask anybody who has applied in South Africa to talk you through the process.
The Swiss rolled out their SFr 20 billion (Swiss Franc) package (around R390 billion) of emergency loans to small businesses on March 25, and SFr15 billion of that was dished out in the first week alone.
In a country that is used to things working efficiently, even the Swiss themselves are surprised at the speed of the financial rollout.
Some details of how the scheme works:
The Swiss scheme has two elements. Under the first, businesses can apply for an immediate loan, worth up to 10 per cent of their annual revenue, capped at SFr500,000. The loan is interest free and provided by Swiss banks, which are underwritten with a full credit guarantee on the amount by the Swiss government. A simple declaration is all that is needed.
The second facility lends up to SFr20m, also provided by the banking system. Bern guarantees 85 per cent of the loan, charged at 0.5 per cent interest. The bank assumes risk of the last 15 per cent, charged at a competitive rate.
The UK, along with Italy and Germany and other European countries, is now looking at the Swiss model in order to improve their lending and relief schemes.
Once again, here is a comprehensive list of the funds and relief measures available to help South African businesses during lockdown, as well as the details of the professionals who can help you make sense of it all.
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