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LOAN SCHEME PHASE II
On 13 May National Treasury and the South African Reserve Bank, in partnership with participating commercial banks, launched the Covid-19 SME loan scheme aimed at giving financial support to small and medium enterprises (SMEs) affected by the lockdown.
In response to feedback received, the initial scheme has been revised into what is referred to as Covid-19 Loans Phase II. It is now open for applications under the new conditions and scheme rules, which we list below.
As Covid-19 Phase II is effectively an expansion of phase I, the new scheme will replace the previous offering for new applications, but existing loans granted under phase I will run concurrently with phase 2.
If your business needs this loan, your main bank is Nedbank and your business meets the criteria and document requirements, please discuss your needs with your relationship banker.
The details of the loans on offer under the Covid-19 Loan Scheme for SMEs are as follows:
| Covid-19 loan details – what is available | ||
| Covid-19 Phase II | Previously | |
Loan amount |
Up to six months' expense cover (determined by the need of the business to cover its operating expenses) More inclusive in terms of the costs allowed (including covering director’s salaries and operating costs to get business restarted) |
Up to three months' expense cover (determined by the need of the business to cover its operating expenses) |
| Rate | Prime | Same |
| Term | Max six years (up to 12 months deferred + repayment over five years) | Max 5,5 years (up to six months deferred + repayment over five years) |
| Repayment | Fixed monthly instalments Early settlement is also possible (no penalty) |
Same |
| Eligibility criteria | ||
| Turnover | No turnover cap | <R300 million turnover per year. |
| SARS | Registered with SARS | Same |
| Conduct | In good standing with creditors and banks at 30 December 2019 | In good standing with creditors and banks at 29 February 2020 |
| Impacted by Covid-19 | In financial distress, ie the ability to generate revenue has been adversely affected by Covid-19. Exhausted capacity to borrow under BAU terms. |
Same |
Key terms and conditions (not exhaustive)
- Subject to credit bureau checks and a credit assessment by Nedbank.
- Businesses will be prohibited from paying dividends (other than those that constitute salary payments) or repaying shareholder loans until the Covid-19 loan for SMEs has been repaid in full.
- Personal surety by owners is not a condition of the scheme but may be required in certain circumstances.
Application requirements
- Application form (see below).
- Latest audited financial statements.
- Management accounts (up to 29 February 2020).
- Cashflow forecast for the next 12 months.
- Optional: Personal position statement for owners willing to give personal surety.
How to apply
- Please email the application form with the supporting documents to your relationship banker.
- Businesses must apply to their primary bank only.
Business Banking clients should please contact their Business Banker for requirements and guidance through the process.
