Development bank opens €1.1B credit lines to help Covid-affected firms

  • Lusa
  • 18 January 2021

Portugal's development bank opens on Monday applications for two credit lines of support to the economy for 1.1 billion euros.

Banco Português de Fomento (development bank) opens on Monday applications for two credit lines of support to the economy for 1.1 billion euros to support industry, tourism and events, sectors affected by the pandemic.

In a statement, Banco Português de Fomento (BPF) said that the two credit lines had been created to support employment and the maintenance of jobs in three sectors strongly affected by the pandemic – industry, tourism and events.

The support line for the Covid-19 economy – exporting companies in industry and tourism” has an overall budget of 1.05 billion euros.

The Covid-19 economic support line for events has a total budget of 50 million euros and is aimed at companies with a turnover in 2019 of at least 30% from activity in events, whether in infrastructure or audiovisual.

The bank said both lines are available to micro, small and medium-sized enterprises (SMEs), including sole proprietors, in mainland Portugal, with a maximum operating period of up to 6 years, including 12 months of capital grace.

Each company may submit only one financing operation, with a limit of 4,000 euros for each proven job, and all the various operations contracted under the various Covid-19 support lines may not exceed twice the company’s annual wage bill or 25% of total annual turnover in 2019.

A part of the loan may be converted into a non-repayable grant, up to a maximum of 20% of the value of the financing, to be determined according to the maintenance of jobs, for at least 12 months after recruitment, in addition to other requirements specific to each of the lines.

Both credit lines are granted through portfolio guarantees issued directly to credit institutions, which decide on financing requests taking into account their credit risk policy and compliance with the conditions for access to the line, making the process of making funds available to companies faster by reducing the number of people in the decision-making and contracting circuit.

According to the statement, companies cannot have unregulated incidents with the banks, the development bank or entities in which the development bank has an interest, and cannot have any overdue tax or social security payments.

In the case of debts due after March 2020, access to financing is guaranteed, subject to subsequent adherence to the instalment plan.

The development bank added that they cannot consider companies that were in difficulty on 31 December 2019, before economic conditions worsened due to Covid-19.

Companies headquartered or dominated by entities based in countries or regions with a clearly more favourable tax regime (offshore) cannot join either.