- COVID-19 loans will be available from banks to eligible businesses in good standing with their commercial banks 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, contracts with suppliers, etc. Loans will cover up to three months of operational costs and will be drawn down monthly.
- Banks are not obliged to extend COVID-19 loans, and those that do will use their normal risk-evaluation and credit-application processes. A business’ owners may be required to sign surety for the loan.
- Each business may accept only one COVID-19 loan.
- COVID-19 loans will be offered at a single, agreed lending rate by all banks participating in the scheme. The rate will track the repo rate.
- A six-month repayment holiday will commence from the first drawdown, although interest will accumulate from the date on which the first drawdown on the loan occurs.
- Repayment of interest and capital starts after six months and businesses have a maximum of 60 months to do so. Borrowers can repay the loan ahead of schedule.
- The scheme will be rolled out by banks over the next few weeks.
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