For more details and to get a quick overview of the process, please have a look at our Fact Sheet.
Covid-19 Loan Scheme
Investec partners with government to support SA businesses
As announced by President Cyril Ramaphosa, the South African Government is launching a Covid-19 Loan Scheme of R200 billion to support SA business. Investec, as a member of the Banking Association of South Africa, is proud to partner with government and other SA banks on this initiative.
This lifeline will help businesses meet their obligations, secure employment, and help to ensure the economy continues to function.
10 key points about the Covid-19 Loan Scheme
Three-month loan, drawn down monthly
The Covid-19 loan will enable qualifying businesses to get a loan for up to three months for certain operational costs and will be drawn down monthly.
The interest rate on the loan is priced at the prime lending rate by all participating banks.
Six-month payment holiday
The loan has a payment holiday for the first six months (interest is capitalised) from the date of the first drawdown.
From month seven, the outstanding capital and interest roll-up, from the first six months, will be amortised over a period of five years (60 months) and the first payment will be due.
Cover for operational expenditures
The loan is intended to cover specific operational expenditures of the business and are limited to:
o Salaries and wages which applied at 1 March 2020 to employees and directors, trustees, members and other like officers
o Rentals and lease payments in force on or before 29 February 2020
o Supply chain costs, meaning the direct and indirect costs and expenses associated with the domestic and/or foreign supply of goods, materials and services to a business, including (without limitation), the costs and expenses of importing and exporting goods and materials
o Utilities; Insurance premiums
o Other operating expenses limited to security services, cash in transit services, cleaning and maintenance services
What the loan cannot be used for
o Loan amounts may not be used to pay any distributions of any nature whatsoever to shareholders, trustees, beneficiaries, partners and/or directors (except for salary payments to any such parties) and/or repay or prepay any capital or interest on any shareholder, trustee, beneficiary, partner and/or director loans
o The loan amounts may not be used to repay or prepay any existing bank debt facilities at any bank
Business eligibility criteria
An eligible business is defined as:
o Any company, statutory body corporate, close corporation, sole proprietorship, trust or partnership, association, joint venture or any similar entity, but excludes state-owned entities, listed companies and companies with capital market funders or funding instruments
o Having an annual turnover below R300 million (measured at group level) where annual turnover is measured as the aggregate gross revenue of the business (determined on a group basis) for the most recent financial year or the 12-month period ending on 29 February 2020
o Having an existing relationship of either lending or transactional banking with Investec
o Being in good standing as at 29 February 2020
o Being registered with SARS
o Having no existing capacity to borrow
o Being in financial distress as a result of the lockdown an entity that has declared that it has not applied for this relief at any other bank
Submission of documents
Investec could require:
o A calculation of the facility required by the business to fund up to three months of qualifying expenses
o A detailed cash flow projection should support this and substantiate the requested facility
o Year-to-date management accounts noting the current financial position and financial performance
o Most recent financial statements
o Proof of SARS registration
o Constitutional documents of the applicant (if not already in Investec's possession)
o Where the entity has already applied for this loan at another bank, proof that the application was declined, including reasons (if any)
o If required, additional supporting evidence to substantiate specific qualifying operational expenses (eg, rates bills, rental agreements, etc)
One application to one bank
A business can only apply for one Covid-19 Loan from one bank.
Investec encourages businesses to apply to their primary lender.
Investec clients must have an existing primary transactional account or lending deal with us and meet the qualifying criteria.
Risk evaluation to be done
Each loan is subject to each bank’s normal risk evaluation and bank credit application and granting process.
A personal guarantee may be required.
No fees apply
There are no initiation fees or monthly costs.
To apply, please download and complete the application form and contact your Private Banker or Investec for Business Portfolio Manager.