Small businesses turn to banks after loan relief scheme activated

Government has moved into top gear to provide help to small businesses and municipalities with two major announcements by Treasury.

FILE: The loan guarantee scheme is an initiative to provide funds to businesses with an annual turnover of less than R300 million to meet some of their expenses. Picture: 123rf.

JOHANNESBURG - Thousands of small businesses are now expected to turn to their banks for assistance after Treasury activated its loan guarantee scheme.

Government has moved into top gear to provide help to small businesses and municipalities with two major announcements by Treasury on Tuesday.

The loan guarantee scheme is an initiative to provide funds to businesses with an annual turnover of less than R300 million to meet some of their expenses.

Businesses need to approach their banks to apply for access to the money.

Funds borrowed through this scheme can be used for operational expenses such as salaries, rent and lease agreements and contracts with suppliers.

This was one of two major announcements by government.

More than R5 billion has also been made available in support for municipalities to assist them in responding to the COVID-19 pandemic in the 2019/20 financial year.

This support is aimed at assisting municipalities to provide additional access to basic services for vulnerable communities and to sanitise public transport facilities.