FNB has announced that clients can apply for a business loan as part of the R200 billion Covid-19 scheme announced by government.
The scheme – which was first announced by President Cyril Ramaphosa as part of a R500 billion fiscal package – has been developed by Treasury, the South African Reserve Bank, and a number of the country’s commercial banks.
It is aimed at helping businesses that are unable to meet their financial obligations during the lockdown, thus ensuring their resilience for when the economy reopens.
“We commend the government’s emphatic response to shield vulnerable businesses against the adverse impact of Covid-19,” said FNB chief executive officer, Jacques Celliers.
“We believe a government guarantee allows us to continue honouring our obligation to depositors while using our credit extension capabilities to be a conduit for government’s support for qualifying businesses. This is further evidence that partnerships can help South Africa to decisively respond to the impact of the global pandemic.”
FNB has confirmed that businesses which were in good standing as at the 29th of February 2020, with a track record of honouring their credit obligations, will be considered for the Covid-19 Loan Scheme.
The loans will be offered at prime and qualifying businesses will only start repaying the loans six months after disbursement.
The application process will include FNB’s stringent internal credit process, the bank said, as well the overall qualifying criteria set out by government. This includes:
- An annual turnover of less than R300 million;
- In “good standing” with the bank as at 29 February 2020;
- Business is registered with the South African Revenue Services;
- “Financial distress” as a direct impact of lockdown, resulting in inability to generate revenue;
- Loan to be applied to specific operating costs, such as salaries, rental and key operating proof of expenses needs to be provided;
“Covid-19 has worsened global uncertainty and will delay the recovery of our economy from the current recessionary conditions, therefore, businesses will require assistance beyond the lockdown,” said Cilliers.
“This financial support will allow many to optimise their operations to potentially withstand the current economic pressure and retain jobs.”
FNB said that businesses can apply for support via the COVID-19 Loan Scheme through the Bank’s digital and relationship banking channels.