SMALL and medium enterprises (SMEs) of a year and older will next week be able to apply for bridging capital from the Development Bank of Namibia (DBN).
This to cushion the economic impact of the Covid-19 pandemic.
The DBN announced on Wednesday it would be extending Covid-19 relief loans to existing clients, as well as SMEs they have not funded before.
This comes after the bank received a capital injection in the form of a N$450 million loan from the German KfW bank at the end of the last year.
The loan was guaranteed by treasury.
According to DBN, it will extend loans to SMEs requiring bridging capital to carry them through the current low-revenue period.
Enterprises that wish to restructure their business operations to best survive the changing business environment may also apply.
The bank will provide affected enterprises with the financing equivalent of three months, up to a maximum of six months' working capital.
The DBN's chief executive officer, Martin Inkumbi, said this means if a business has a monthly operating expense budget of N$100 000, it can request a loan of up to N$600 000.
Qualifying SMEs need to assess their leveraged ratio (existing debt level) and the ability to meet their existing financial obligations before approaching the bank, and to avoid future financial woes.
The leverage ratio assessment is crucial since companies rely on both equity and debt to finance their operations.
Determining the amount of debt a company has is useful in evaluating whether it would be able to repay it.
Information on criteria for qualifying for the DBN's offer can be obtained from its website from Monday, or from the bank itself.
Inkumbi said the bank would continue to finance SME start-ups.
"The priority for the Covid-19 business-relief loans will be to preserve business continuity and jobs, therefore these loans are targeted at existing enterprises," he said.
The DBN forecasts that the funding, which wil be customised according to individual enterprises' needs, would offer financial relief to around 200 SMEs.
Industries such as tourism and hospitality, and transport and logistics will be prioritised.
The facility may also be used for diversifying into new business areas to help strengthen existing companies's resilience to future shocks.