Here’s how businesses can apply for new loan guarantee, says Standard Bank

Standard Bank announced today that it is ready to receive applications for loans under the Covid-19 Loan Scheme for Small and Medium Enterprises, which was announced by President Cyril Ramaphosa last month.

This follows an announcement (opens as a PDF) yesterday from National Treasury that the scheme is now operational.

The initial set of participating banks — Absa, First National Bank, Investec, Mercantile Bank, Nedbank and Standard Bank — are ready to accept loan applications from eligible businesses which bank with them

The Treasury has provided a guarantee of R100-billion to the scheme with the option to increase it to R200-billion if it is necessary and the scheme is successful.

The National Treasury has provided banks with a R100-billion guarantee, so that they can boost lending to small and medium-sized firms

Under the scheme business customers with an annual turnover of less than R300-million will now be able to apply for a Covid-19 Term Loan.

To qualify, Standard Bank said a business must also be:

• In good standing as at 29 February 2020 with their Bank
• Registered with the South African Revenue Services
• Have no existing capacity to borrow
• Negatively impacted by the Covid-19 lockdown and the resultant slowdown in the economy

The bank said funds borrowed through the scheme can be used for a business’s operational expenses such as salaries, rent, lease agreements and contracts with suppliers.

Loans will cover up to three months of operational costs. Standard Bank customers who want to apply for the loan can do so through accessing the application form on Standard Bank’s Covid-19 Business Term Loan webpages.

It said to date Standard Bank has granted instalment relief to nearly 150 000 customers in need of financial support in the wake of the national lockdown amounting to over R1-billion in instalment relief per month on the R44-billion of total loans affected.

In addition to the above scheme, and in response to Covid-19, Standard Bank Business customers with turnover of less than R20-million per year have been automatically offered instalment relief via a three month payment holiday.

In addition,  all business customers have been offered a range of relief measures, on an opt in basis, ranging from payment holidays, instalment reduction, debt consolidation, interest rate reduction to ex gratia insurance payment for lost income.

Standard Bank has also taken an active role in administering the South African Future Trust, which provides relief in the form of a five-year interest free loan for SMMEs, for the purpose of supporting permanent employees of the business.

Thus far, over 19 000 employees of Standard Bank small business customers are being supported with wage-relief through this scheme. For more around this scheme, visit our SAFT Loan Covid-19 website page.

Featured image: Standard Bank via Facebook