SIH Anti-Corona Guarantee to Help Small and Medium-Sized Businesses
Bratislava, March 30, 2020 – The Slovak Investment Holding (SIH) is launching a new programme of financial aid for small and medium-sized enterprises (SMEs) to help carry them over the period of difficulties caused by the necessary health and safety measures to contain the spread of the novel coronavirus.
Today, the SIH released a call for financial institutions to take part in the implementation of the ‘SIH Anti-Corona Guarantee’ financial instrument. The purpose of the instrument is to enable banks to extend favourable-terms bridging loans to SMEs, topped up by an interest rate subsidy for those enterprises which manage to keep their staffing levels unchanged. The principal objective is to help SMEs overcome financial difficulties caused by the ongoing situation and preserve existing jobs in spite of the crisis.
The financial instrument consists of a portfolio guarantee for financial institutions and an interest subsidy of up to 4% for those enterprises that manage to preserve existing jobs. By means of said financial instrument, the SIH will shoulder a part of the banks’ credit risk ensuing from new loans extended to the SMEs negatively affected by the current situation. Thanks to the SIH Anti-Corona Guarantee, it is expected that the loans may be provided as interest-free.
The SIH Anti-Corona Guarantee is expected to facilitate the provision of new bridging loans with maturity of no more than four years (including a 12-month grace period on both the principal and interest) and up to almost €1.2 million per loan. The beneficiary businesses will be able to use the funds loaned to cover both their investment and operating costs in order to preserve employment. The programme is funded using the European structural and investment funds, namely Operational Programme Integrated Infrastructure and the government budget of the Slovak Republic.
The total amount of funds currently allocated to the SIH Anti-Corona Guarantee is €38 million; however, with a view to the ongoing negotiations between the SIH and the Ministry of Economy, as well as the measures recently announced by the Slovak Government, a significant growth in the overall volume of funds allocated to this financial instrument is expected.
The SIH believes that the upcoming instrument will be of interest to eligible financial institutions and proposes that they use it to offer the most favourable loan terms possible to their clients. The financial institutions are expected to indicate their interest and establish their eligibility during the course of April 2020.