Rejoice Moletsane was delighted earlier this year when she scored a potentially life-changing business deal to run a tuck shop at a school in an an upmarket suburb.
Moletsane, an aspiring entrepreneur from Gauteng, was retrenched in 2018, and had used R200,000 of her retirement savings to purchase equipment to run the business.
But her joy at running a retail outlet on a three-year contract was cut short when the growing business at the Sandton private school was abruptly disrupted by the Covid-19 lockdown.
Cashflow dried up as the lockdown barred pupils from attending classes.
Moletsane applied, albeit unsuccessfully, for Covid-19 loan scheme funding from First National Bank to kickstart the business as soon as her tuck shop was permitted to resume trading.
Now she is worried that the business might go belly up after her attempts to obtain funding were unsuccessful.
The lockdown, which came into effect on March 29 after President Cyril Ramaphosa declared a state of disaster, resulted in her income drying up.
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Ramaphosa later announced the establishment of a R200bn loan guarantee scheme which would see a number of banks lending to businesses that have been impacted negatively by the Covid-19 lockdown.
However, Moletsane's loan application was declined despite her having a three-year contract and offering her house as surety.
The tuck shop contract is still active and will resume in January.
"I require R50,000 to buy stock and pay salaries for two months at least until we are profitable again. I believe that by the third month we should see minimal profits and stand on our own," she said.
"This happened although I ticked all the boxes and my business legal documents are in order. Their reason for rejection was my bank account was fairly new despite the evidence that in the first two months of trading my revenue produced positive results.
"What is really frustrating is that in my second attempt in August I offered the bank to consider my three year business deal from the school plus I could offer surety of my home at market value of R1.2m, whereas the balance owing on my bond is R600,000."
She showed Sowetan an email in which she complained to National Treasury in July about the conduct of the bank, and she was referred to smmeonline.gauteng.gov.za
When approached for comment, FNB confirmed that Moletsane's loan applications were rejected.
FNB's SME customer segment head said: "Regrettably, the application was declined as the business did not meet all the eligibility criteria as set out by the National Treasury and the SA Reserve Bank.
"The bank has communicated the decision with the business. Every application for funding is evaluated on its individual merits in line with the qualification criteria for the scheme. Due to client confidentiality, we cannot provide any further information."
The Banking Association of SA in August told parliament that "banks have volunteered cash flow relief of R32,83bn from March to 15 August".
"Of the R13,39-billion in loans approved to 10,754 businesses, to the average value R1,2m, 40,292 applications were received, with a potential value of R24,4-billion, 39% were in the process of being assessed, 25% were approved and taken-up, 9% rejected because they were not eligible as per the Treasury and the SA Reserve Bank eligibility criteria and 25% were declined because of banks’ risk criteria," said the association.
Moletsane said she was now banking on raising the funds through her friends.
The Black Business Council questioned why government came with stringent measures for businesses in need of bailout after they were hit hard by the Covid-19 lockdown.
BBC chief executive Kganki Matabane told Sowetan that the issue with the Covid-19 relief fund for small businesses was that it only benefited companies in good standing.
"The issue/problem is more the criteria used by those who designed the scheme and not necessarily the banks. One of the criteria is that the companies applying for relief should be in good standing with the banks," he said.
"The problem is that most black businesses are not paid on time, if at all, by government and big business. This means they are not in good standing with the banks and as such, won't qualify for relief."
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