Survival tip for SMEs after limited good news in budget speech

PHOTO: iStock

There was limited good news for SMEs in the budget speech, but small businesses still have to save wherever they can to ensure that they do not fail, especially since the economy’s medium-term growth outlook is deteriorating in a difficult domestic and global environment, while real GDP growth is projected to average only 1.4% from 2023 to 2025.

Small business therefore has to do what they can to navigate through the tough times, says Jason Mellow, head of MiWay Business Insurance.

“There were some highlights in the budget which SMEs can capitalise on in the new fiscal plan, such as no major tax hikes, as well as a new fiscal support package to support the use of renewable energy.”

Minister of Finance Enoch Godongwana said in the budget speech when he announced that businesses will be able to reduce their taxable income by 125% of the cost of an investment in renewables, there will be no thresholds on the size of the projects that qualify and the incentive will be available for two years to stimulate investment in the short term.

He also said that changes to the Bounce Back Loan Guarantee Scheme are proposed to incentivise renewable energy, rooftop solar and address energy-related constraints experienced by small and medium enterprises and that government will guarantee solar-related loans for small and medium enterprises on a 20% first-loss basis.

In addition, he announced that to ease the impact of the electricity crisis on food prices, the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, will be extended to manufacturers of foodstuffs for the next two years.

Mellow says these measures offer limited relief to SMEs battling to survive load shedding and other challenges. He gives these tips to help businesses save.

Where can SMEs get support?
There are several initiatives in place to help and several major private sector organisations have stepped up to offer SMEs relief and support, including mobile networks offering competitive bundles and rates, major enterprises growing SMEs under their CSI and Enterprise Supplier Development (ESD) programmes and banks and insurers offering support services to help SMEs run their businesses more efficiently.

MiWay has the MiBusinessAssist business support service that offers support in partnership with Digicall, to help reduce unnecessary operational costs for small and medium-sized business. They offer specialised business support services can help reduce the burden on South Africa’s SMEs, offering benefits such as access to IT and marketing expertise, legal and labour advice, financial advice and office assistance.

Ina Opperman/The Citizen