Enterprise, Sustainability, April 14, 2020, 7:26 p.m.

Pro-bono advice for SA businesses in trouble due to lockdown

Author: riaan@wecanchange.co.za

Financial and strategic advisory company, Fluence Capital, is now offering pro-bono support and guidance for South Africans facing the potential loss of their business due to the COVID-19 shutdown.

Analysts expect the shutdown to result in massive job losses and business closures, with the ILO increasing its job loss forecasts to nearly 200 million worldwide. Locally, the SARB expects over 1,600 small businesses going insolvent and around 370,000 jobs lost in the formal sector alone.

“Many companies tend to wait until the last minute to seek help when their businesses are in financial trouble,” says Fluence Capital director, Sandra Beswick. “With the COVID-19 pandemic hitting so suddenly, many are almost frozen, waiting to see what happens. But there are real pitfalls to doing nothing. The sooner they act to turn the business around with what finances and resources they do have, the better their chances of survival. Planning for the imminent transition of your business will focus your mind and keep you at the forefront of change.”

Beswick says many small and mid-sized companies that depended on monthly cash flow to pay salaries and stay afloat are now seeking relief. “The South African Government and other institutions have announced several schemes and initiatives offering funding for the survival of businesses. We have done our research and have collated a comprehensive list of the schemes which include their processes, terms and conditions. This relief funding could help, but businesses must also be aware that it could cause further challenges down the line. Depending on their circumstances, they might be better off cutting expenses and managing overheads.”

There is also the option of business rescue, which acts in the best interests of creditors and employees. However, the regulations and processes to be negotiated in business rescue are onerous, she warns.

Beswick notes that the impacts of COVID-19 have come as a shock to every system in the economy, making it difficult for businesses to plan ahead. “We assess the commercial viability of the business and can advise on how to plan for the different lockdown scenarios that might emerge. We always look to find a solution, with a major objective to save as many jobs as we can,” says Beswick.

Fluence Capital will help struggling businesses to understand the funding options available, and apply for funding. The company can also advise on debt restructuring, conduct a risk assessment, analyse cash flow to prioritise payments to be made, and advise on the requirements of a moratorium on payments.

“We want to use the time we have inadvertently been given to review struggling businesses and consider implementing actions for the future,” says Beswick.

To arrange a free private telephonic or online consultation, businesses can call Sandra on: 082 338 5007