BusinessLive reports that the government’s Covid-19 loan guarantee scheme, which is aimed at helping businesses battered by the pandemic fallout, has gone live.  

The scheme will provide government-guaranteed loans to small and medium-sized businesses (SMBs) with a turnover of less than R300m, to help cover their operational expenses such as salaries, rent and lease agreements.  The money will be made available through six participating banks, namely Absa, First National Bank, Investec, Mercantile Bank, Nedbank and Standard Bank.  The Treasury has provided a guarantee of R100bn to the scheme — with the option to increase the guarantee to R200bn “if necessary and if the scheme is deemed successful”.  It forms part of the R500bn stimulus package announced by President Cyril Ramaphosa in April.  The intention was not for the banks to make a profit from the loans, and any net profits would be pooled to offset losses in the scheme to minimise total losses to SA taxpayers, the Treasury said.  “It will assist businesses that are facing liquidity issues to stay alive for the duration of the lockdown and return to being economically productive once the restrictions are lifted,” noted Mike Brown, CEO of Nedbank.

• Read the full original of the report in the above regard by Lynley Donnelly at BusinessLive

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