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March 24, 2020

Extension of support measures to mitigate the economic effects of the coronavirus spread

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Referring to our previous article - Interest-free funding for entrepreneurs affected by the coronavirus infection - this COVID I loan programme has ended. The available funds were used up quickly due to the high number of applications received. The good news is that a continuation and an expansion have been announced by the Czech government.

COVID II programme - continuation

CMZRB together with the Ministry of Trade and Industry is continuing to support small and mediumsized entrepreneurs and tradesmen in the form of guarantees for commercial loans from CZK 10,000 to CZK 15 million, with a financial contribution to pay interest up to CZK 1 million. More information will be published in the following days. The allocation of this program should amount to CZK 5 billion. In combination with the possibilities of commercial banks, the Minister of Trade and Industry estimates that up to CZK 30 billion could be available.

Programme expansion

Although it is not yet entirely clear if the announced extension will be fully associated with the consequences of government measures due to coronavirus and COVID-19, the key elements are more or less clear:

  • Applications will be accepted until 30.6.2023
  • Eligible applicants are small and mid-sized companies
  • Loan of CZK 1 - 45 million; no fees, interest-free loan
  • Maturity up to 7 years, resp. up to 10 years (if the loan is mainly intended for real estate)
  • Possible postponement of payments up to 3.5 years
  • Financial subsidy to pay interest of commercial loan up to CZK 2 million
  • Security according to the agreement between the client and CMZT
  • Support of 35 % or 45 % from the eligible expenditure, according to the size of the applicant’s enterprise
  • Eligible expenditures are:
    • acquisition of new machinery and equipment
    • acquisition or reconstruction of buildings used for business activities
    • acquisition of technological processes, programmes, licenses and software

In Czech

Support of research and production of medical equipment

Two programmes are being prepared to support the production of medical devices and supplies (allocation of CZK 200 million) and the development of medical devices and supplies (allocation of CZK 300 million).

At the national level, other instruments are being developed to support enterprises of different sizes and self-employed people and their businesses. The operational programs under the European Structural Funds (ESIF) are currently under review to identify what measures can already be financed under ongoing programs.

In the meantime, programmes for research funding have been launched at the EU programme level. The European Innovation Council (EIC) called on start-ups and small businesses to apply with proposals for innovative approaches and solutions for funding under the current call with the allocation of EUR 164 million and the deadline for applications until 20 March 2020 (more information). In the near future at the European level, new financing instruments can also be expected to address the current situation and mitigate impacts.

The available funds in the first round were used up rapidly. Therefore, it is essential for companies to be prepared and submit your application immediately at the point this extension is launched.

EY offers their support

Our member EY is offering other NCCC Traders by Nature members their support with this application and administration - they can either prepare it for you or provide advice and support, while you do it yourself. This can be in the form of webinars, handbooks or consultations to make sure you submit the required documents correctly and on time.

Please contact:
Martin Veverka, Senior konzultant - martin.veverka@cz.ey.com +420 730 191 873
Peter Mecko, Manažer - peter.mecko@cz.ey.com +420 735 729 265

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