Covid-19 Loan Scheme
President Cyril Rhamaposa announced on 21 April 2020, as per of the government initiative, in partnerships with the banks, to support the SME sector impacted by Covid-19.
The scheme has officially been opened on 04 May 2020 and the local banks are working with National Treasury, the SARB and other participating banks to facilitate the details of the scheme. The scheme offers a five-year loan at the prime lending rate to cover the next three months of business operating expenses.
Herewith a summary of the scheme:
– Term loan (66 months);
– Loan value is equal to maximum of three months qualifying operating expenses;
– Lending interest rate at prime;
– No monthly repayments for the first six months (however interest accrues);
– After six months the loan is to be repaid through equal monthly instalments over a five year period;
– Loan can be repaid earlier in full without penalties.
– Term loan (66 months);
– Loan value is equal to maximum of three months qualifying operating expenses;
– Lending interest rate at prime;
– No monthly repayments for the first six months (however interest accrues);
– After six months the loan is to be repaid through equal monthly instalments over a five year period;
– Loan can be repaid earlier in full without penalties.
Criteria:
– Annual turnover must be less than R300 million;
– Operating entity: CC’s, Pty (Ltd), Trusts;
– Business to be registered with SARS;
– Business must be in good standing with the bank;
– Need to demonstrate direct impact by Covid-19;
– Businesses will be prohibited from paying dividends or repaying shareholder loans until the loan has been repaid in full.
– Annual turnover must be less than R300 million;
– Operating entity: CC’s, Pty (Ltd), Trusts;
– Business to be registered with SARS;
– Business must be in good standing with the bank;
– Need to demonstrate direct impact by Covid-19;
– Businesses will be prohibited from paying dividends or repaying shareholder loans until the loan has been repaid in full.
You need to contact your bank to apply for the loan and to obtain additional information relating to the terms and conditions.
Final thought
You should only consider to take out the loan if it is a necessity for the survival of your organization. All debt needs to be honored and will influence the profitability of your business.
You should only consider to take out the loan if it is a necessity for the survival of your organization. All debt needs to be honored and will influence the profitability of your business.
Take care of yourself, your family, your team, your clients and your community. Seek the opportunities that will undoubtedly arise and monitor your finances closely. You have our full support.
Together, we’ll do this!
