Following a month since one of South Africa’s biggest natural disasters tore through the coastal town of Knysna, local businesses are facing a series of ripple effects which could prolong a serious dry spell for the rest of the year.
According to research done by Retail Capital (RC), a company which offers various funding solutions, local businesses are having to find ways to mitigate the costs of repairs and reconstruction, while also dealing with the evacuation of close to 10 000 people from the area.
“Many of these small businesses are in desperate need of short-term funding to bridge the initial cash flow shortages and assist with the rebuilding of the economy which will only see positive growth in the next few months”, explains Retail Capital CEO, Karl Westvig.
An unfortunate piece of data collected by Westvig’s company shows that between 38% to 50% of local consumers were uninsured prior to the fire, forcing them to take money from their business to effect residential repairs; repairs which will see high costs for plumbers, electricians and other specialised labour.
However, the biggest problem the area faces is the impact on local tourism which accounts for a large chunk of the local economy.
With close to 700 properties destroyed, 30 of which confirmed hospitality structures, the town has seen a loss of between 300 and 400 beds and close to 2500 hospitality related job losses.
This means a drastically reduced influx of people, leading to a subsequently reduced spending potential in the area.
Calls for business aid have been made, with companies like Retail Capital offering preferential terms on loans to businesses affected by the Knysna fires.
Should you or your business be willing to donate or offer similar services, please contact the Knysna Fire Disaster Relief Fund.