Are payment holidays available to me and what does it mean to me as a client? In what circumstances are interest rates charges reduced?

Responsible Institution:  Nedbank

Nedbank has announced a number of relief measures to help individuals and small businesses during the COVID-19 pandemic. Specifically, Nedbank will offer their clients several options, based on individual circumstances, rather than a one size fits all.

Nedbank will offer bespoke payment arrangements, which allow consumers to repay their arrears over time.

This includes restructuring of debts, where the latter includes possible term extensions and reduced instalments.

Nedbank will also suspend/stop legal action under certain instances.

 COVID-19 Relief offered by Nedbank:

Application Process

Contact the dedicated COVID-19 debt relief contact centre on 0860 110 702 and follow the prompts or contact your Relationship Banker or Business Manager to discuss options.

Or click here for more information.

Nedbank has also partnered with the South African Futures Trust (SAFT) to support South African SMMEs’ employees who are at risk of losing their jobs or will suffer a loss of income because of COVID-19. For further information pertaining to the South African Future Trust, please click here.

Nedbank in Partnership with SAFT

The South African Future Trust (SAFT) is an independent trust set up by Nicky and Jonathan Oppenheimer, in partnership with the South African government and private sector.

Specifically, SAFT will transfer funds directly to employees of participating SMMEs, via interest-free loans where employees themselves carry no liability.

What is it?

An interest-free 5-year loan to qualifying SMME’s exclusively for the purpose of paying the salaries of their permanent employees.
The loan has no minimum monthly payments requirements and only needs to be settled in full at the end of the term. Employees carry no liability for the repayment of the loan.
Qualifying SMME’s will get an R750 per qualifying employee per week, over a period of 15 weeks, ie. R11,250 per permanent employee. The total loan amount is a function of the number of employees to be included (no limit in terms of the number of employees).

Eligibility Criteria

• Any SMME with less than R25 million turnover in good standing

• Includes sole proprietors; partnerships; operating trusts; CC and PTY Ltd
• Must be trading for 24 months or more
• Must be in good standing with Nedbank, statutory creditors and with the bureaus as at the end of February 2020
• Income has been impacted by Covid-19 and therefore requires assistance to pay their permanent staff salaries.

Application Process

Applications are now open.

Please make sure you meet the said qualifying criteria.
You must apply to your main bank.

To apply:

Applications will be considered on a first-come, first-serve basis. You will be informed about the decision and contacted if further information is required. If you did not submit Annexure A and the resolution together with the application, please wait for a banker to contact you.

1. Download and complete the Application Form – please click on the following link and navigate to the bottom of this page.
2. Download and complete Annexure A: Employee details. This can be submitted together with the application form, or once the in-principle has been obtained. Please click on the following link and navigate to the bottom of this page
3. Download and complete the resolution (not required for sole proprietors). Please click on the following link and navigate to the bottom of this page.
4. Email your application to saft@nedbank.co.za
5. Once approved and all documents have been received, you will be emailed an approval letter and the loan agreement (including Annexure A and Application).
6. This needs to be signed and returned before payments can be processed to the email of the banker who is liaising with you.
7. Payments for all loan contracts signed up to close of business on Tuesday will be processed on Thursday.

When Will Businesses Be Expected To Start Repaying The Loan?

The interest-free loan is repayable in full on, or before 31/12/2025. Instalments can be made over the course of the 5 years, as determined by the business owners/ directors/ Trustees, Board members, etc., or as a lump sum payment on or before 31/12/2025. There will be no penalties for early repayments. Bank account details for repayment, along with a relevant unique reference to be used, will be provided on loan agreements.

Queries

For queries, you can contact your relationship banker or call our dedicated small business contact centre team on 0860 116 400.

For the application forms as well as other related information, please click on the following link.

Nedbank is also one of the major local banks through which the South African Reserve Bank’s R200bn COVID-19 Loan Scheme will be facilitated. This scheme will allow qualifying businesses to apply for loan funding from their primary bank for three months of operational costs, such as salaries, rent and supplier payments. All loans will be subject to bank credit approvals.

Nedbank notes the following re the COVID-19 SME Loan Scheme:

(This information is as reflected on Nedbank’s website).

What Is The Covid-19 Sme Loan Scheme?

This loan scheme, announced by the President on 21 April 2020, is an initiative by government, in partnership with banks, to support the SME sector impacted by Covid-19.

The scheme offers five-year-term loans at the prime lending rate to cover the next three months of business operating expenses.

Nedbank is working with National Treasury, the SARB and other participating banks to finalise the details of the scheme. Please check this website for further updates.

Details Of Loan Offering

(preliminary – subject to change)

The following loan constructs are offered to qualifying SMEs:

• Term loan (66 months/5,5 years).
• Priced at prime interest rate.
• No payments due for the first six months (but interest accrues).
• After six months the loan is to be repaid through equal monthly instalments over five years.
• Loans can be repaid earlier in full without penalties.

The loan amount is determined by the operating expenses of the business:

• The loan covers up to three months’ full operating expenses.
• There is no upper limit, but the amount is driven by business needs and affordability.
• Operating expenses include salary and wages; rental and lease cost; utilities; supply chain; and other operating expenses. eg security).

Loan terms and conditions include the following:

• Businesses will be prohibited from paying dividends or repaying shareholder loans until the Covid-19 SME loan has been repaid in full.

Please refer to the full loan agreement for more detail (not yet available).

Qualifying Criteria

(preliminary – subject to change)

Applicants must meet all the following criteria to be considered for this loan:

• Operating entities – all business types, but specifically excluding individuals, state-owned entities, listed companies and companies with capital market funders or funding instruments.
• Turnover <R300 million per year.
• Registered with SARS. In good standing as at 29 February 2020 (ie up to date on all credit agreements, good credit history).
• Ability to demonstrate direct impact by Covid-19.

Application Process

Please note that businesses can only apply to their main/primary bank.

To apply please prepare the following:

1. Completed, signed loan application form (not yet available).
2. All documentation listed on the document checklist (not yet available).
3. Completed, signed resolution to demonstrate mandate (not yet available).

Once you have familiarised yourself with the detail and requirements of the scheme, please contact your dedicated relationship banker or business manager at Nedbank to submit your applications or discuss any questions you may have.

Please note the application process is expected to open end of April (date to be advised) and updates will be made on the site ahead of the go-live date.

Please click here to access the Nedbank website with further information

Please see National Treasury’s press release re the Covid-19 Guaranteed Loan Scheme for Small and Medium Enterprises here.The information is provided as reflected on Nedbank’s website.