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Gesher – a lifeline in the storm




“It certainly will assist my business as soon as international travel resumes and with the transition into a post-COVID-19 scenario. Your [Gesher’s] response and assistance was sympathetic to the difficult situation we find ourselves in the tourism industry,” said one borrower, the sole proprietor of a business with R1 million in annual turnover.

“It’s remarkable what Gesher is doing to keep business afloat,” said another business owner who has 12 employees and R5 million in annual turnover. “This whole process is overwhelming, and I have very mixed emotions – so much gratitude that this is available, but shattered that I’m in a situation in which I need to ask for help when I have always been independent. Having said that, by helping my business survive, I in turn can keep others afloat and pay it forward.”

Gesher (meaning “bridge” in Hebrew) was established in May 2020 to assist majority-Jewish-owned SMMEs (small and medium-sized enterprises) across South Africa, which were intrinsically viable prior to the crisis and have been negatively impacted by COVID-19. An independent entity in conjunction with the Chevrah Kadisha (the Chev), its cornerstone grants are from the Donald Gordon Foundation and another foundation.

To date, it has received expressions of interest from more than 400 SMMEs across South Africa, with a total loan requirement of R120 million. These businesses employ about 5 000 individuals, and by extension, support roughly 50 000 dependants.

“People who have been in business for many years have seen a disappearance of revenue overnight. Even after being adaptable and creative to try to stay afloat, they have had to tap into savings to pay salaries, have maxed out their credit cards, have overdrafts at their limit, and have downgraded their medical aids,” said Gesher Fund executive Bernard Berger. “These are people who have always been independent, and have given tzedakah [charity] for years, and now need bridging finance to get to the other side of this crisis.”

While privately funded initiatives were established to try assist businesses, these initiatives were overwhelmed by applications, and their funds quickly depleted. Government initiatives such as the TERS-UIF have been slow to release funds, and many applicants have struggled to access the funds required.

It has also been reported that the government-backed COVID Loan Guarantee Scheme specifically targeted at SMMEs has to date advanced a very small proportion of the R200 billion available, and many SMMEs have been unable to access these funds.

“The primary aim of Gesher is to ensure the long-term viability of majority-Jewish-owned SMMEs, provide a lifeline for their owners and employees, and ensure that they survive this pandemic and continue being productive members of the Jewish community and the wider South African society,” said Berger.

Interest-free loans of R50 000 to R750 000 are issued for 12 to 36 months to fund short-term, COVID-19-related working and operating capital requirements including staff salaries and wages.

“We have assisted businesses from most industries. These include medical, legal, architectural, and veterinary practices, electricians, mechanics, security, audio services, restaurants, accommodation, and manufacturing. Very few industries have been shielded from this pandemic. Even those which were able to operate through the lockdown faced a significant loss of turnover as businesses were closed, or in the case of, say, electricians, people didn’t want them coming into their homes,” he said.

“The real irony is that in the face of a health crisis, the medical profession has been particularly hard-hit as the sick have avoided seeing doctors unless absolutely necessary. I think the cases which stand out most are those businesses in events and tourism. Bookings have been cancelled and demand has disappeared. They now face a very uncertain future.”

He notes that some Jewish businesses aren’t utilising what Gesher offers even if they qualify for a loan. “It’s very difficult for us to pinpoint why this is. We believe it has been well-publicised, but given the disruptions to our lives, the stresses so many people face, and the complete information overload we all have around COVID-19, there are certainly business owners who aren’t aware of Gesher.

“Some people have also been overwhelmed by the application process, and/or the information requirements, but we are here to help, and have worked with applicants to understand their businesses and how we can work around any gaps in their information,” he said.

“I certainly hope that pride doesn’t play a part in a decision whether or not to apply. This isn’t a ‘black swan’ event, as they described the 2009 global financial crisis, it’s a flock of black swans! No business had anything like this in its scenario planning. At Gesher, we are keen to ensure that every viable business survives this disruptive period.

“By supporting these businesses, we have helped to fill a funding gap, and hopefully, we have provided the business owners with the financial resources required to see this through,” he said. “But that’s just one aspect. These businesses employ 1 000 people [more than 10% of whom are Jewish], who support 10 000 dependants. That’s a lot of people being fed, clothed, housed, and schooled. Almost every business has been faced with the difficult choice of retrenching employees as one way to stem their cashflow crunch. Businesses which have approached Gesher now have the resources to hold out that much longer.

“And then there’s the tax generated by these businesses, from VAT, to payroll, and income tax, so the economic impact can be measured on multiple levels. If you know of a business which might meet our criteria and is at risk as a result of COVID-19, it should be encouraged to consider Gesher.”

The organisation operates with just two part-time executives and a team of more than 50 volunteers. Every application for funding has to be properly assessed to ensure that it meets the terms of Gesher’s mandate.

“The time and effort invested by these volunteers is substantial, and there’s no way we could have achieved anything near this level of activity without this support base,” said Berger. “We also work closely with the Chev, which has provided our administrative and financial backbone, allowing us to get up and running in record time.”

Gesher has had to turn away applicants which didn’t meet its requirements. “In some instances, these were businesses which we assessed as not viable pre-COVID-19, already facing significant difficulties, and needing further capitalisation or other measures. This isn’t part of our mandate. Some were start-ups with no meaningful track record. Others weren’t viewed as businesses. Anyone declined the opportunity to progress at Gesher was referred to the COVID-19 relief programmes of the Rambam Trust, the Chev, or Jewish Community Services.

“We also turned away applicants for whom Gesher wasn’t last-resort funding. We have assisted a few applicants in obtaining bank funding, in doing so releasing our resources for applicants for whom bank funding isn’t available.

“Given the funding structure of the South African Jewish community, including schools, welfare, aged care, medical, security, and shuls, it’s imperative to ensure the continuity of these SMMEs, their owners, and employees,” Berger said.

“The pressure has somewhat eased, but the hard work now begins,” said a borrower with 10 employees and R1.5 million in annual turnover. “Business will never be the same, and to adapt in the right direction will be the challenge.”

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