Johann Rupert’s Covid-19 fund to lend R100million to restaurants in South Africa
The fund formed to distribute money donated by Rupert Family and Remgro in 2020 will lend R100 million to struggling restaurants.
The fund created to distribute money donated by the Rupert and Remgro family in 2020 will lend R100 million to struggling restaurants.
The Sukuma Fund, which was established to distribute one billion rand donated by the Rupert family and Remgro Limited to support small businesses last year, announced a partnership with the Federated Hospitality Association of Southern Africa (FEDHASA) in an attempt to preserve jobs in the sector.
He has now decided to direct some of the remaining money to ailing restaurants.
“In order to have maximum impact with the remaining funds, we have adapted our approach to partner with industry organizations who understand the specific challenges their members face. We felt this was the most effective way to make a meaningful impact in helping businesses overcome Covid -19 related challenges, ”said Sukuma Fund spokesperson David Morobe.
A total of R100 million will be allocated to eligible restaurants to reduce rent and increase working capital if needed.
To be eligible, a restaurant must be independent and officially registered. It must also provide proof of financial solvency, regulatory compliance and future viability, among others. In addition, applicants must be members of FEDHASA. But companies that are not yet members of FEDHASA will be eligible if they register as members.
Eligible restaurants will receive unsecured interest-bearing loans of between 250,000 and R1 million each, which they will repay over five years. Interest will be charged at the prime rate. But the loans will not incur any interest or repayment obligation for the first 12 months.
“From what we’ve seen, the biggest challenge that struggling restaurants still face is meeting their rent payment obligations. Although the rents for many of these businesses have been cut, there remains a major operating cost that many restaurants still struggle to meet cash flow levels, ”Morobe said.
He added that once restaurant rental obligations are met, working capital requirements can be considered for financing.
FEDHASA estimates that nearly 30% of restaurants were forced to close their doors at the height of the lockdown last year. He said that even though the restrictions have been relaxed, thousands of people are still struggling to recover and are on the verge of shutting down.