The Covid-19 SME Loan Project
As part of the R500 billion investment that the SA Government will make to stimulate the economy, R200 billion has been made available as guarantees, via the Reserve Bank, to various banks to assist small businesses which have been severely impacted due to the lockdown.
SA Franchise Warehouse, who has been facilitating loans in the franchise industry for many years, has the infrastructure and knowledge to facilitate and assist small businesses with their application, approval and payout for a Covid-19 loan at optimum conditions.
Any business only qualifies once under the Government Guarantee, which means that the optimum amount needs to be applied for. There are no penalties for early settlement in case funds are not fully utilised.
To fast track the process, SA Franchise Warehouse has established a Covid-19 customised on-line application portal, specifically set up for this purpose.
Below you will find a set of questions and answers on the technicalities relating to the initiative.
1. What fees are SA Franchise Warehouse charging?
3% of the loan amount, or a minimum of R10 000, excluding VAT. The fee will be invoiced on approval of the loan directly to the business but will not be capitalised against the loan. There will be no initiation fees charged by the bank as they recover their costs through the interest rate charged.
2. What are the likely terms of the loan?
- Interest rate: Prime
- Term: 60 months repayment with 6 months payment holiday
- No penalties for early settlement
3. Can I submit my application directly to my bank and save SAFW’s fee?
You certainly may but we recommend that you consider the following:
- The initiative allows for certain inclusions in the loan amount but needs to be motivated.
- The application, including projected cash flows, must demonstrate that the loan can be afforded and will be repaid within the term allowed. We know that turnovers will recover gradually and that all assumptions and financial modelling will require special attention. Applications where the affordability of debt cannot be proven, may not be approved.
- Any application submitted to the credit department within the banks needs to include a motivation which is generally prepared by the relationship manager inside the bank. In the interest of time, SAFW will be performing this task to allow the bank to turn around the application quicker.
The rules of the initiative do not explicitly require personal surety by the directors, but banks will probably require personal surety as a condition of the loan. SAFW will include in its submissions arguments on why surety should not be called upon.
4. How long does approval take?
5. How do I manage my creditors in anticipation of the approval of my loan?
6. Is the service from SA Franchise Warehouse limited to franchised businesses?
7. May I apply for a second loan if the funding received with the initial loan is not sufficient?
8. Will I have to enter into an agreement with SA Franchise Warehouse to start the process?
You will be required to accept the T&Cs as part of the first phase of the application and the applicant will be requested to sign a letter of authority for SAFW to be able to facilitate the process and to confirm its access to client information. Please note that BusinessXL Maximum is an appointed agent accredited to complete the application on your behalf.
9. When will the loan be paid out?
10. Which expenses can the loan proceed be used for?
11. Do I have to submit a business plan?
12. May I commission SA Franchise Warehouse to manage my application even after I have applied to my bank?
Start your application
If you are interested in registering an application, please complete the form below, and we can then assist you to complete your application.