FNB partners with government to support SME growth through the Bounce Back Loan Scheme

by | May 3, 2022 | News, Wineland

The recent launch of government’s much-anticipated Bounce Back Loan Scheme is set to have a tangible positive impact on the growth and development of South Africa’s vital SME sector.

FNB is proud to have partnered with government to facilitate these vital business building loans. The bank 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.

According to Gordon Little, CEO of FNB Commercial, FNB’s involvement in the loan scheme represents the next chapter in the bank’s ongoing commitment to helping build a resilient and sustainable SME sector for the country.

“When national government first identified the need for this type of Treasury-backed loan scheme to help South Africa’s SMEs get back on their feet after more than two years of significant challenges, FNB wasted no time in reaffirming its commitment,” Little says, “and our involvement in the programme is another important way in which we are delivering on our promise to help the country’s all-important small businesses sector.”

According to Little, the Bounce Back Loan scheme is about much more than its name implies, because the programme is aimed at all qualifying SMEs, irrespective of whether they were directly impacted by the Covid-19 lockdowns, the 2021 protests or the recent flooding in KZN.

“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,” he explains, “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.


CEO of FNB Commercial Gordon Little.

Based on FNB’s recognition of the importance of the scheme, the bank 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,” he says.

FNB loan options

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 offer very generous interest rates and repayment terms. 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.

“In recent years, FNB has invested significantly into simplifying its credit risk assessment and business lending processes, and we have started to see a healthy increase in SME lending activity over the past few months,” Little says, “we are confident that this Bounce Back Loan Scheme has come at precisely the right time for our country, and we are excited about the prospect of being instrumental in reigniting SME growth in South Africa and helping to put the sector on a sustainable growth path.”

FNB has received several accolades and honours which affirms its commitment to empowering SMEs to continue playing a meaningful role in economies across our continent. The bank was named the Best SME Bank in SA and Africa at the Global Finance SME Bank Awards 2021. It also received an honourable mention in the Best Bank for Women Entrepreneurs category at the Global SME Finance Awards 2021.

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

Product features

  • This loan will operate similarly to FNB’s current Business Loan but with lower interest rates

Key features include:

  • 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%

Important points to remember:

  • 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=

FNB small business clients can find out more about the Bounce Back scheme, or apply for a loan from FNB by visiting www.fnb.co.za.

WATCH: Gordon Little discusses commercial banking trends in 2022

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