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Coronavirus: Minister launches measures for businesses and homes (Updated)

Finance Minister Constantinos Petrides

Three schemes involving interest rate subsidies and direct cash assistance to businesses designed to counter the impact of the coronavirus were officially launched by the government  on Friday.

Finance Minister Constantinos Petrides said the schemes involved a government support package for households and businesses stricken by the Covid-19 crisis.

The plans concerns interest rate subsidies for households and businesses and direct financial assistance to small businesses and self-employed, which needed the approval of the EU.

The first plan is an interest rate subsidy for new housing loans and the second is an interest rate subsidy on business loans.

The minister also said the direct financial assistance to businesses will start getting paid next week without the beneficiaries having to apply.

Commenting on the housing loan plan, Petrides said it concerns new loans for primary residences.

The plan covers loans approved from March 1, 2020, until December 31,2020, and is available from any licensed bank on the central bank’s list.  The list is set be announced in the coming week, the minister said.

“Mortgage loans are excluded, as the interest rate is subsidised by other special plans,” he said.

The amount of the loan whose interest rate will be subsidised must not exceed €300,000, he added.

Petrides said the duration of the interest rate subsidy will be for a period of four years, and the interest rate will be subsidised by up to 1.5 percentage points (150 basis points).

The loan, he added, can be disbursed within two years form the date of approval by the bank.

Petrides said as of Monday, interested parties would be able to contact their bank, if they are part of the plan, and express interest in taking part in the plan.

The business loan plan also includes an interest rate subsidy and will be available for loans issued from March 1 until December 31, 2020.

“We believe that this measure will contribute towards satisfying the needs in working capital but also for investments within the Republic,” he said.

The duration of the interest rate subsidy will be four years for businesses, and will be available to very small, small, medium-sized, and large businesses. It will also be available to self-employed individuals.

The minister added that the loan must not exceed €800,000, and it will be available to businesses, which will have loans approved by the European Investment Bank (EIB) by December 31, 2020.

Business loans covered by different government plans will be excluded, Petrides said.

The interest rate subsidy for business will cover 350 basis points to very small, small, and medium-sized businesses, as well as self-employed individuals for the first and second years.

For the third and fourth years, these businesses will have 200 basis points covered by the interest rate subsidy.

Large businesses will have 150 basis point covered.

Regarding the lump sum to small businesses and self-employed individuals who had their activities partially or completely suspended during the lockdown,  Petrides said it had been decided to support entities with up to 50 staff.

Specifically, businesses employing one person will receive €1,250, while businesses employing two to five people will receive €3,000.

Businesses with six to nine employees will receive €4,000, and businesses with ten to 50 employees will receive €6,000.

The cheques will begin to be given out to the businesses starting next week, Petrides said.

He added the businesses do not need to register if they have already taken part in previous government support plans.



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