Cyprus Mail

Ceiling for housing and business loan subsidies extended

Υπουργός Οικονομικών – Δηλώσεις//fi

The government announced Friday it was extending the ceiling for housing and business loans included in its interest rate subsidy scheme, as well as its duration until the end of the year.

Finance Minister Constantinos Petrides said the value of housing loans was being raised from €300,000 to €400,000 and up to €1.8m from €800,000 for business loans.

Petrides said the state now expected the value of loans that will be included in scheme by the end of the year to reach €1bn.

By the end of December last year, 2,337 housing loans worth €301m and an average interest rate of 1.67 per cent, had been subsidised.

At the same time, 339 business loans worth €87m and an interest rate of 2.96 per cent had entered the scheme.

According to Petrides, the rise in the housing loan ceiling is effective February 17. The maximum subsidy has risen to €24,000.

The duration will be four years from the date the loan is granted with the state subsidising up to 1.5 per cent.

People who have already borrowed €300,000 under the scheme, can apply for additional funds, provided they meet the criteria, and the amount does not exceed €400,000.

The minister announced similar arrangements for business loans, as long as they are approved by the EU as compatible with state aid rules.

The changes provide for a rise in business loans from €800,000 to €1.8m per entity or self-employed individual.

Also, businesses operating in the fishing sector will benefit from subsidised interest rates on loans up to €270,000 instead of the current €120,000, while those in the production of farming products will be able to borrow up to €225,000 instead of €100,000.

The duration of the subsidy will be four years: in the first two years, the government will subsidise an interest rate of up to 3.5 per cent for all companies.

In the third and fourth years the subsidy will be 2 per cent fort small and medium businesses, and 1.5 per cent for large entities.

Businesses that enter the scheme cannot dismiss beyond 2 per cent of staff they employed on the date the scheme was approved by the EU without replacing them. The condition is in force for six months.

Loans cannot be used to cover existing credit facilities, whatever their status.

The scheme covers loans approved or will be approved between March 1, 2020 and December 31, 2021.

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