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COVID-19 Term Loan applications are now closed

COVID-19 Business Term Loan application is now closed

The third phase of the Government's COVID-19 Term Loan Scheme is now closed.  

Frequently Asked Questions

What are the qualifying criteria?

To qualify for the COVID-19 Term Loan businesses must:  

  • Have an existing banking relationship with Standard Bank.  
  • Be in good standing with the Standard Bank as of 31 December 2019.  
  • Be registered with the South African Revenue Service (SARS).  
  • Be in a state of financial distress and require funding for operational expenses.  
  • Have no existing capacity to borrow funds to alleviate financial distress; this excludes overdraft facilities and/or facilities not typically intended to support operating expenses.  
  • Be a 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 (including their direct and indirect subsidiaries) and companies with capital market funders or funding instruments.  
  • Be a South African entity; funds lent and advanced through this scheme are to ensure South African businesses' financial stability and continuation only.  
What are the key features of the COVID-19 Term Loan Phase 2?
  • Loans of up to R100 million are available per business, at a consolidated business group level.  
  • Usage of loans will be for business operational expenses for a period of up to 3 months. Operating expenses include salaries, rent and lease agreements, contracts with suppliers, and utilities.  
  • The loan repayment period is 60 months (5 years).  
  • You may apply for a payment holiday (deferral) of up to 6 months; however, based on Standard Bank's credit assessment, a shorter deferral period may apply.  
  • Approval of applications for qualifying businesses is subject to the Bank's risk-evaluation and credit-application processes. The Bank holds the right to decline an application based on its assessment.  
  • A business may only hold one COVID-19 loan at one bank:  
    • An exception to this will be where an eligible business applies for a third COVID-19 loan under Phase 3 and is approved per the relevant terms and conditions. The eligible business will then hold three COVID-19 Term Loans with the same Bank – provided the loans collectively do not exceed the maximum loan amount (R100 million for up to 3 months' operating expenses), or maximum payment holiday period (6 months), permissible under the COVID-19 loan product.  
    • Further exceptions may exist for loan amount requests above R50 million; your Relationship Banker will guide you in these instances.  
  • Interest will accumulate from the date on which the first drawdown on the loan occurs.  
  • No additional administration and/or initiation fee will be charged for these loans.  
  • The loan can be settled in part or in full before the maturity term without penalty.  
  • The following restrictions apply should customers qualify for the COVID-19 Term Loan:  
    • The loan cannot be used to pay dividends and shareholder loans, and payment of such loans is restricted until the COVID-19 loan has been repaid in full.  
    • The owners may be required to sign personal surety or personal guarantee.  
    • The loan amount cannot be used to pay retrenchment packages.  

 

* Should your loan be approved, your loan agreement will contain details that reflect the most up-to-date information and terms and conditions.  

What is the Interest Rate applied for the COVID-19 Term Loan?
  • These loans will be offered at the prime interest rate.  
If I take up a COVID-19 loan, can I take up any other loans during the loan tenor?
  • Yes, a business that has qualified for a COVID-19 Term Loan under either Phase 1, Phase 2 or Phase 3 will be able to access further loans in future with a financial institution.  
  • To do so consent from the bank where you hold your COVID-19 Term Loan will be required. For businesses that hold the COVID-19 loan with Standard Bank, and look for further funding with us, this consent will take place automatically as part of the credit assessment. If you hold a COVID-19 loan with another financial institution, consent will need to be provided in writing from the relevant bank.  
How does the payment holiday (payment deferral) work?
  • You may apply for a payment deferral (i.e., payment holiday) of up to 6 months. The first payment will be due the month after the end of the deferral period, and every month after that, for a total of 60 months, unless the loan is settled early.  
  • The payment holiday will kick in the month after the last drawdown of the loan occurs (e.g. if you have 6 drawdowns taking place monthly for 6 months, your 6-month payment holiday will start the month after which that last drawdown took place).  
I already have a COVID-19 Term Loan from phase 1; can I apply for phase 2 as well?
  • Yes, you can apply for Phase 3 as well.  
  • If you received a COVID-19 loan under the previous phases, but still require emergency relief due to the extended lockdown, you may apply to the same bank for a third COVID-19 loan. The total of the first and second loan may not exceed the maximum amount of R100 million, or the maximum requirement of 3 months' operating expenses.  
  • Should you wish to apply for a further 3 months' operating expenses under Phase 3, please use the same loan application form. You will need to indicate that you already hold a COVID-19 Term Loan with Standard Bank in the relevant section and apply for an additional 3 months' operating expenses (in order not to exceed 6-months' operating expenses) with either a 3 or 6 month payment holiday.  
  • You can also apply to extend the payment holiday period of your existing COVID-19 Term Loan from 3 months up to a maximum of 6 months. You can do this by accessing the same application form and completing the relevant sections.  
  • Should you qualify for a third COVID-19 Term Loan, the three loans will run concurrently (and will not be consolidated into one loan).  
  • If you were previously declined for the previous phase COVID-19 loans on the basis on not meeting scheme one rules, you may reapply for Phase 3 of the COVID-19 Term Loan.  
What type of expenses are considered part of operating expenses?
  • A loan application will be assessed to consider funding business operating expenses for a maximum period of up to 3 months, with a payment holiday of up to 6 months.  
  • Operating expenses include items such as:  
    • Salaries and wages  
    • Rental and lease payments in force prior to 29 February 2020  
    • Utility payments  
    • Supply chain expenses  
    • Cleaning and maintenance services  
    • Insurance premiums  
    • Other operating expenses, such as security for premises or cash in transit. 
How much can I borrow through the COVID-19 Term Loan?
  • COVID-19 funding is intended to provide immediate and short-term relief to enable businesses to continue operations while protecting jobs. Therefore, loan amounts will be assessed based on the businesses' operating expenses for a period of 3 months, with a maximum borrowing limit of R100 million at a consolidated business group level.
When will I have to repay the Term Loan?
  • Repayment of interest and capital starts the month after the approved payment holiday. Borrowers can repay the loan ahead of schedule without incurring any penalties.  
  • Repayment of the loan will take place via debit order or through manual transmission on a pre-determined date.  
  • The borrower will not incur early settlement penalties unless the borrower settles the loan in full before the agreed term's expiry by means of a refinance.  
  • Interest will accrue from the first drawdown.  
How can I apply for a COVID-19 Loan?
  • As a Standard Bank customer, you can apply online through the Standard Bank COVID-19 website. Applications for Phase 3 are now open: click here to apply.  
  • If you applied for Phase 1 and/or Phase 2 and are now applying for Phase 3 or applying for an extension on your current Phase 1 or Phase 2 payment holiday, the same application link can be used.  
  • For Corporate and Investment Banking (CIB) clients, while you may apply online through the link above, it is recommended that you contact your CIB Relationship Manager to begin the application process.  
What information must I provide on the application?

Standard Bank customers must provide the following information when applying for the COVID-19 Term Loan:  

  • In addition to information about the business and director/s, shareholder/s, partner/s and trustee/s, the following information will be required:   
    • View of business turnover over the last 12 months.  
    • View of business expenses, current debt repayments and net profit before tax over the previous 12 months.  
    • Business's income tax number.  
    • Description of how COVID-19 has impacted the business.  
    • A list of the business' monthly operational expenses for 6 months for which a loan is required, broken down by:  
      • Salary and wages payments  
      • Rental and lease payments  
      • Supplier payments  
      • Utility payments  
      • Other operating expenses.  

Please note that the Bank may request additional documentation once your application has been received (based on our assessment and verification criteria). This may include annual financial statements and/or proof of income and expenses.  

How long will it take to assess my application for the COVID-19 Term Loan?
  • We continue to receive a high volume of applications; therefore, you can expect to hear back from us within 14 business days as to your application's status.