The Treasury will provide a new “Bounce Back” loan guarantee scheme and equity help to small businesses as the R200 billion loan guarantee scheme announced in April 2020 to help with the impact of the Covid-19 impact on economic activity only resulted in an uptake of R12bn.
The small business loan guarantees of R15bn will be facilitated through participating banks and development finance institutions.
This allows access for qualifying non-bank small-and-medium loan providers.
The government will partner with loan providers by underwriting the first 20 percent of losses for banks and other eligible small and medium loan providers.
The eligibility criteria, including the requirement for collateral, has been loosened. This mechanism will be launched and operational in April.
In addition, a further R5bn business equity-linked loan guarantee support mechanism will be launched. It will also be available to qualifying non-bank small and medium finance providers.
Details of the terms of the equity-linked guarantee mechanism will be provided soon.
BUSINESS REPORT ONLINE