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I would fact check Nedbank's Alan Shannon's statement that the banks are carrying 50% of the risk. My understanding is Treasury has underwritten 94% of the risk on these COVID loans, and banks carry only 6% downside risk - in my opinion the demand for personal surety, especially from Tourism businesses, is completely counter to the spirit of these loans being a stimulus or relief package...and over-reaching by the banks given their true risk.These loans are business as usual by the banks, in a time of business unusual.And quite frankly, with all the uncertainty facing Tourism businesses right now, all of which are outside of our control, signing personal surety would be an extremely high risk to take.
We had exactly the same experience. FNB claimed that government stands surety in case the business is not able to repay, but the fine print on the contract says the opposite confirming that you are personally liable for the full amount out of personal assets. We also did not take the risk in the end as to start repayments by end of December seems awfully risky. In the end there has been no real relief for the tourism industry aside from TERS for a portion of salary if you are lucky.