BUSINESS NEWS - South African banks are now able to accept loan applications from businesses that have been severely affected by the Covid-19 pandemic.
“The initial set of participating banks (Absa, First National Bank, Investec, Mercantile Bank, Nedbank and Standard Bank) are ready to accept loan applications from distressed businesses which bank with them,” said the statement.
The development comes after President Cyril Ramaphosa’s announcement of the loan guarantee scheme which was set to begin operations from today (12 May).
The scheme, which has been finalised by all three parties, will provide loans guaranteed by government to businesses with an annual turnover of less than R300-million.
“Funds borrowed through this scheme can be used for operational expenses such as salaries, rent and lease agreements and contracts with suppliers,” added the Treasury.
Government and commercial banks will be sharing the risks of these loans.
Treasury initially provided a guarantee of R100-billion to the scheme, with the option to increase the guarantee to R200-billion if it was necessary and if the scheme was deemed successful.
Further queries should be directed to the respective banks which are administering the scheme.