Companies request €10.5B from state credit line which has €6.2B available

  • Lusa
  • 26 May 2020

The credit support lines launched by the government because of the Covid-19 crisis reached 10.5 billion euros.

Business requests for credit support lines launched by the government due to the Covid-19 pandemic reached 10.5 billion euros, compared to the availability of 6.2 billion euros, the chairman of the Portuguese Business Confederation (CIP) said.

“The applications that have been submitted exceed 10.5 billion needed,” said António Saraiva, president of CIP, at a press conference to present the results of a survey on companies’ investment prospects after the pandemic.

Saraiva added, bearing in mind that the line is 6.2 billion euros available and that access to the funds is on a “first-come, first-served” basis, there are companies that will not be able to access it if the line is not increased.

The president of the CIP said that, according to information provided by the Ministry of the Economy, 6.1 billion euros have been approved with state guarantees, in other words, almost all the 6.2 billion euros have been approved.

And of the 6.1 billion euros approved, there are 3.1 billion contracted, the leader of the employers’ confederation said.

Saraiva once again criticised the “excessive bureaucracy” in access to credit and the government’s lack of perception of the size of the support measure for companies.

According to data from the survey released on Monday by CIP in partnership with ISCTE University, the percentage of companies that requested bank financing last week increased from 38% to 42%.

Of the companies that applied for financing, 69% had not yet received the money last week.

The CIP is in favour of creating an emergency capitalisation fund of 3 billion euros for companies, through risk capital funds, in the face of the crisis of the Covid-19 pandemic, a measure that the confederation has called “Portuguese bazooka” and which is part of a set of proposals that the confederation has presented to the government.

The confederation is calling for an increase in credit lines, which are “depleted”, and the strengthening of the response capacity of the financial system and the mutual guarantee system.