What Does The 2023 SONA Mean For Your Small Business?

2023 SONA

If you’re a small business owner, the 2023 SONA is something that you’d want to know more about.  On Thursday the 9th of February, President Cyril Ramaphosa gave the 2023 State of the Nation Address covering topics such as food security, plans for combatting load shedding, as well as how the Covid-19 “bounce back” loan scheme will be used to help small businesses recover after the devastating effects of the pandemic, and assist in funding solar power solutions for entrepreneurs. 

“National Treasury is working on adjustments to the bounce back loan scheme to help small businesses to invest in solar equipment” says Ramaphosa, “banks and development finance institutions [will be able] to borrow directly from the scheme to facilitate the leasing of solar panels to the customers.”

Why alternative power solutions are needed by small businesses:

Alternative power solutions, especially for small businesses, are becoming an increasing necessity due to loadshedding causing things like slowed or disrupted production, fresh produce loss, system failures due to power surges and an increase in safety issues. Although the bounce back loan scheme, mentioned in the 2023 SONA, was originally curated with Covid-19 relief in mind, the extension of its role into funding alternative power solutions is sure to be welcomed by small business owners and entrepreneurs.

Also read: Load Shedding – How Alternative Funding Can Save Your Business

Unemployment in South Africa – The stats and the plan to aid it:

According to recent research, in the third quarter of 2022 South Africa’s unemployment rate was at 32.9% which is down 1% from the previous period’s 33.9%, it’s also below the market estimates of 33.4%. This has been the lowest unemployment rate since Q1 of 2021 and is likely due to the Presidential Employment Stimulus which has given over a million people work and other livelihood opportunities. 

During the 2023 SONA, Ramaphosa went on to speak about the challenge of unemployment amongst the youth of our country, as the youth unemployment rate which measures the employment of job-seekers between the ages of 15 and 24 years old, declined further to a low of 59.6% in the third quarter of 2022, however still remains high despite the decrease in percentage. He stated that “the Employment Tax Incentive has been expanded” in an attempt to encourage South African businesses to hire more employees of a younger demographic. “Last year I announced that we would be seeking to reduce red tape so that we can rid our country of the unnecessary bureaucracy that often holds us back,” said The President.

Ramaphosa added that the RTR team “has taken a collaborative approach, working with departments and agencies in areas such as the mining rights system, tourism transport operator licenses, visas and work permits, early childhood development and the informal sector,” which although sounds great in theory, we can only hope that it works in practice.

What is the Red Tape Reduction team? 

The objective of the RTR team is to make real progress in reducing the number of overly complicated or biased rules, regulations, procedures, and processes that impede economic growth and job creation in important economic sectors.

Funding plans for SMEs & SMMEs:

Another point from SONA 2023 to keep in mind is that the president mentioned that through the SEFA – the Small Enterprise Finance Agency – South Africa plans on providing over 90 000 entrepreneurs with access to a share of R1.4 billion in financing. Furthermore the SA SME Fund, in partnership with the government, is working towards establishing a R10 billion fund to aid SMME expansion. This will likely be split into R2.5 billion being provided by the government and the other R7.5 billion will be raised by the private sector.

What does this mean for your small business?

In conclusion, the 2023 SONA has shed light on numerous concerns, especially those relating to the progression and growth of small businesses and entrepreneurial sectors in South Africa. With the correct documentation your business could be eligible to receive funding from the bounce back loan, and possibly the SA SME and government entrepreneurial funding scheme too. However, this may not be a solution for everyone and applying for alternative business funding from financing companies, such as GroWise Capital, is likely to be a faster and more efficient way of funding your small business. The accessibility of alternative business funding that is tailor made to your business’s needs will allow your small business to continue its growth trajectory regardless of the ever looming threat of load shedding and the economic ripple effects of the pandemic. 

How To Qualify for Same-Day Business Funding

Looking for fast, small business funding? In order to qualify with us your business needs to be CIPC registered for over 6 months, have a minimum monthly turnover of R35 000, and utilise a business bank account. Apply now and get access to same-day business funding of up to R3 million in under 24 hours : Apply here.

Share the Post: