Flemish Region - Financial Measures
FLEMISH REGION
1) Additional guarantee scheme on request for loans
Businesses (large businesses, one-man businesses, non-profit organizations and SME’s) having difficulties to receive financing contracts can request a guarantee scheme at PMV/Z. PMV/z can grant a guarantee scheme of maximum 75% for credits. The guarantee scheme can be requested to a maximum of 1,5 million EUR. This guarantee scheme can also be requested for certain leasing contracts.
The guarantee scheme can also be requested by businesses regarding their current non-financial debts of maximum 12 months. But the condition remains that the credit is being used to solve problems caused by the current COVID-19 crisis.
There is a one-time fee to be paid to benefit from the guarantee scheme, the fee amounts to 0,25% (instead of the normal 0,5%) and is calculated as follows: amount of the guarantee x years of the guarantee period x 0,25%. The granted guarantee scheme is limited to 10 years for amounts to 750.000 EUR.
The guarantee scheme is granted for current, non-financial debts such as Social Security (NSSO) debts, VAT debts or debts regarding rent or salaries (of more than 3 months). It can also be used for debts which were paid with own funds or in order to settle a current account.
The arrangement is valid until end of 2020.
The guarantee scheme can be requested at the financial institution or leasing company.
2) Extended guarantee scheme for large businesses
The Flemish authorities have extended the guarantee scheme for loans for large businesses. These large businesses can request a higher guarantee through Gigarant.
The guarantee capacity has been extended to 3 billion euro (instead of 1,5 billion). In order to benefit from the extended guarantee scheme, businesses will have to prove their financial health on December 31, 2019.
These businesses will benefit from a lower fee to benefit from the guarantee schemes.
A business can only apply for the Flemish guarantee scheme if it cannot benefit from the federal guarantee scheme.
3) Support mechanism on waiver of commercial rent
If the owner agrees to waive 1 or 2 months' rent (rent as of April 2020), the tenant will be able to obtain a loan of up to 2 months for the following 2 months' rent from the Flemish government. The tenant applies for a loan at PMV for a maximum amount of 25,000 EUR. The owner receives the rent for those 2 months of the bank and the tenant will repay the rent to the bank over a maximum of 2 years at an interest rate of 2% (including bank charges).
Only companies that have been/are compelled to close down their business because of the Corona measures and that do not have rent arrears on 15 March 2020, can apply for this support mechanism.
The practical modalities of this support measure provided by the Flemish government are still unknown.
4) Extension of the win-win loan
Friends and family (and small shareholders with up to 5% of the shares) can support SME’s by providing a win-win loan. The win-win loan scheme is temporarily extended due to the current Corona crisis. The lender can provide up to 75.000 EUR and each company can receive up to 300.000 EUR through the win-win loan. The win-win loan can be requested for a period between 5 - 10 years and has an interest rate of maximum the legal interest rate (in 2020: 1,75%) and is at least half of the legal interest rate.
In return, the lender receives a tax benefit of 2.5% on the outstanding capital.
Loans expiring in 2020 can be voluntarily extended for 2 years so that companies can spread out the repayment. In that situation, the tax benefit of 2.5% for the lender is extended to a period of maximum 10 years.
If the SME is unable to repay the amount due to insolvability, the government guarantee will temporarily increase to 40% (instead of 30%) for agreements concluded until 31 December 2021 for the entire period of the loan.
Useful Links
https://www.unizo.be/uitbreiding-waarborgregeling-door-corona;