FNB launches ‘bounce back’ loans for qualifying business in South Africa – check how to apply

FNB launches ‘bounce back’ loans for qualifying business in South Africa – check how to apply

FNB has partnered with the South African government on its bounce back loan scheme. The scheme is aimed at providing additional funding to qualifying businesses to grow the South African economy and to facilitate job creation.

The bank said it has already begun processing applications and will enhance its processes over the next few weeks, to ensure that customers can access the loans seamlessly across all its channels.

“This loan scheme is not about emergency financial relief, it’s an opportunity for us to contribute to the growth, development and resilience of the entire SME sector,” said Gordon Little, chief executive of FNB commercial

“Rather, these bounce back loans have the potential to act as a real catalyst of growth for SMEs, which is more important than ever in terms of contributing to the country’s sustainable economic recovery.”

Little explains that, while the previous Covid-19 assistance loans were restrictive in terms of qualifying criteria and what businesses could use the funding for, the application processes for these bounce back loans are far simpler, and applicants are not limited in terms of how they can use the funding.

The only restrictions are that the loans can’t be used to repay shareholder loans or settle debt and entities and sole proprietors must be tax registered. This means that companies are able to invest the funding into the aspect of their business they need to in order to support its future growth.

FNB said it will prioritise the provision of bounce back loans, as the default term lending solution, for business clients with an annual turnover of between R0 – R100 million.

Little explains that this decision was taken to demonstrate FNB’s commitment to leveraging the Bounce Back loans as invaluable SME support mechanisms. “We want South African small businesses to know that when it comes to supporting and growing their businesses, FNB is all in.”

Who can apply for the bounce back loan scheme?

• Any business (with a maximum turnover of R100 million per annum) that requires relief for any business purpose
• Businesses that are looking to grow and scale
• Businesses with a good credit record with no arrears or judgements
• The application is subject to FNB’s risk evaluation and bank credit application and granting process

What do you get? 

The loan options range from a minimum of R10,000 to a maximum of R10 million and, to encourage uptake and ensure that businesses are not put under financial pressure the scheme offers very generous interest rates and repayment terms, FNB said.

The loans come with a low, variable interest rate of prime plus 3%, and successful applicants have 60 months to repay the capital with no penalty for early settlement, it said. This loan will operate similarly to FNB’s current Business Loan but with lower interest rates.

• Fixed Loan Term – The Bounce Back Business Loan is a 60-month amortising loan;
• Early Settlement – Customers can settle the loan early and pay no penalty fees;
• Automatic Payments – Customers can pay using a debit order from their business account on a date convenient for them;
• Interest Rate – The loan rate is Prime + 3%;
• The loan options range from a minimum of R10,000 to a maximum of R10 million;
• You can only have one active Bounce Back Loan at a time;
• The loan cannot be used to pay back existing debt.