Global law firm DLA Piper, which has advised the Banking Association South Africa (Basa) and South Africa’s biggest banks on the country’s loan guarantee scheme, has announced that the banks are ready to receive loan applications from businesses impacted by the coronavirus (Covid-19).
The loan scheme, which was activated on May 12, was announced by President Cyril Ramaphosa in April and will help businesses with a yearly turnover of less than R300-million to fulfil their operational expenses.
The loans under this scheme will be guaranteed by government, which will share the risk with Absa, First National Bank, Investec, Mercantile Bank, Nedbank and Standard Bank.
Treasury has guaranteed an initial R100-billion and could increase the guarantee to R200-billion if the scheme is successful.
DLA Piper South Africa managing partner Johannes Gouws said his company was proud to support its clients, government and, indirectly, more than 700 000 small and medium-sized businesses through this initiative.
“Working on what is seen to be one of the largest financing transactions that South Africa has ever seen shows the trust our clients have in DLA Piper as well as the strength and depth of our capability,” said Gouws.