Covid-19 Loans

COVID-19 SA Franchise Warehouse SME Loan Initiative

As part of the R500 billion investment that the South African Government will make to stimulate the economy, R200 billion have been made available as guarantees, via the Reserve Bank, to various banks for assisting small businesses which are in distress as a result of Covid-19.

Certain retail sectors have not been affected as seriously as others by the actual lock down but virtually all businesses are still exposed to the aftermath of job losses and the uncertainty of when turnovers will be restored and how much working capital will be needed to sustain the business during this time.

SA Franchise Warehouse has been facilitating loans in the franchise industry for many years and has the infrastructure and knowledge to facilitate and assist SMEs with the application, approval and pay out for a Covid-19 loan at optimum conditions through their existing commercial bank.

SA Franchise Warehouse has the team and the skill to structure applications in such a way that the optimum loan amount can be applied for within the parameters set by the Reserve Bank.

In order to fast track the process, SA Franchise Warehouse has established a Covid-19 customised mobile friendly on-line application portal, specifically set up for this purpose.

To date SA Franchise Warehouse has a 100% success rate in terms of approvals on submissions we made but we do make our own feasibility assessment on any application we receive before we submit.

In July 2020 the Reserve Bank announced the relaxation of certain criteria attached to loan applications which makes it slightly easier to qualify for larger loan amounts.

Below you will find a set of frequently asked questions and answers on the technicalities relating to the initiative.

We understand that any application for business funding is a challenging prospect at the best of times. As a result of Covid-19, having to take on debt just to stay in the game, is a true test to any entrepreneur's character. SA Franchise Warehouse offers its services to make the process somewhat easier and to make sure your interest is protected as far as possible.

If you are interested in registering an application, please click on the “Register for COVID-19 Loan” button below in case you have not already been registered.

Upon registration you will receive an email with a link to your personalised application portal with instructions on how to proceed with your application.

FAQs

1. What fees will SA Franchise Warehouse be charging for the service?

3% of the loan amount irrespective of how the loan amount was calculated by the bank, or a minimum of R15 000. VAT will be added to the fee. The fee will be invoiced directly to the business only after the approval of the loan. No fee will be charged if the application is not successful. There will be no initiation fees charged by the bank.
2. What are the likely terms of the loan ?
1. Interest rate : Prime (Currently 7 %)
2. Term : 60 months repayment with 12 months payment holiday
3. Penalties for early settlement : None
3. Why should I make use of the service offered by SA Franchise Warehouse and not save the fee by managing the process on my own ?
The technical presentation of any application for funding impacts on the outcome, speed and terms of approval.
1. The initiative allows for certain inclusions in the loan amount but needs to be motivated through an understanding of the working capital position of the business at the time of re-opening of the business.
2. The application, including projected cash flows, must demonstrate that the loan can be afforded and will be repaid within the term allowed. We know that turnovers will recover gradually and that all assumptions and financial modeling will require special consideration. It is also important to quantify the financial effect of Covid-19 on the business.
3. Any application submitted to the credit department of the bank needs to include a motivation generally prepared by the relationship manager at the branch. In order to speed up this process, SAFW will be performing this task to fast track credit submission.
4. How long does approval take?

Incomplete or ill supported applications are the primary reason for delays in approvals. After receipt of information required by the business owner, SA Franchise Warehouse will turn around the preparation of an application in two days and submit to the primary bank of the business as soon as the business owner has signed off on the numbers. Some banks undertake to provide an answer in 7 to 14 days if the application is complete but this is entirely dependent on the number of applications in the pipeline at the time.
5. How do I manage my creditors in anticipation of the approval of my loan?

Regular communication with suppliers and creditors is crucial to the management of the relationship and the security of your supply chain. Upon submission of your application to the bank, SA Franchise Warehouse will communicate to your suppliers, per your request, confirming the status.
6. Is the service from SA Franchise Warehouse limited to franchised businesses?

Not at all, SA Franchise Warehouse happens to be entrenched in the franchise industry for years but our service is available to any loan application up to R100 million.
8. Will I have to enter into an agreement with SA Franchise Warehouse to start the process?

Applicants will be required to accept the T&Cs as part of the first phase of the application. Applicants will be requested to sign a letter of authority to their bank for SA Franchise Warehouse to be able to facilitate the process and to confirm its access to client information.
9. When will the loan be paid out?

Once approved, the loan will be paid out in three monthly tranches as soon as loan documentation has been signed with the bank.
10. Which expenses can the loan proceed be used for?

Operating costs, including salaries and wages, rental and lease repayments, utilities, insurance premiums, security costs, supply related costs and certain operating expenses for six months.
11. Do I have to submit a business plan?

Yes. The bank will require an abbreviated business plan but SA Franchise Warehouse will assist with a draft based on information submitted.
12. May I appoint SA Franchise Warehouse to manage my application even after I have submitted an application to my bank?

Yes, you are the client of the bank and may appoint any party to assist in the same way you may appoint your accounting officer or business consultant to manage the process on your behalf. Kindly forward all the information you have provided to the bank to info@safw.co.za. We will register your application on our platform, pre-populate information received and e-mail you a link to access your application portal for submission of possible further information.
13. What other conditions may I expect to be included with the approval of my loan?
Some of the following conditions were included in previous approvals and applicants must be prepared to accept such conditions, should they be included, in order for SA Franchise Warehouse to proceed with your application -
1. Once a Covid loan has been accepted, the applicant business may not apply for further debt without the consent of the bank providing the Covid loan.
2. Personal sureties by the directors and/or shareholders of the business.
3. Entering into a new lease agreement with the landlord in the event of the remaining term of the current lease agreement being less than 5 years.
14. What are the primary criteria used by the banks to assess eligibility for a Covid loan ?
1. The business must be able to prove that it has been negatively affected as a result of the pandemic, in other words sales must have been compromised during and subsequent to lockdown.
2. The business must be solvent. Assets must exceed liabilities at the date of last available Annual Financial Statements, which may not be prior to Feb 2019.
3. The business must have been profitable prior to the pandemic and be able to demonstrate ultimate ability to repay the Covid loan.
4. The business must have been in good standing with the bank as at 31 December 2019.

Complete the form if you would like more information

Covid Loan Enquiry

Disclaimer: SA Franchise Warehouse is not associated in any manner to any of the brands listed on this website apart from listing details of their respective franchise opportunities. We do not underwrite their viability as a business opportunity nor the quality of the service or products offered by their franchisees. Any complaints need to be directed to the franchisors directly.