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20 March 2020

Updated - Interest-free funding for entrepreneurs affected by the coronavirus infection

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COVID-19 financial support

- UPDATE 23 March 2020 -

The first round of the COVID Loan programme has ended. The available funds were used up quickly due to the high number of applications received. A new round (“COVID 2”) is being prepared for launch at the beginning of April. See our latest article on this.

The Czech government national programme COVID-19 Loan was prepared by the Ministry of Trade and Industry (MPO) and the Czech-Moravian Guarantee and Development Bank (ČMZRB).

It aims to facilitate access to operational funding for small and medium-sized enterprises, whose economic activities are limited due to the occurrence of the coronavirus infection and related preventive measures. Read the full announcement.

The programme includes a 600,000 million Czech crowns (23 billion EUR) concessional credit line to which it plans to add an additional 10 billion Czech crowns (400 million EUR). These funds will be drawn from the European-funded operational programmes of the Ministry of Trade and Industry.

Companies will be able to obtain zero-rate loans worth between 500,000 and 15 million Czech crowns with the suspension of the payment of instalments for one year. Applications for loans can be submitted from 1 April 2020. On 18 March, requests to a total value of more than 5 billion Czech crowns had already been received.

The Ministry is also investigating other targeted measures on the sectors most affected by the crisis, such as the tourism sector.

Key points of the COVID-19 subsidised lending procedure

  • The applicant must complete the application, quantifying the damage suffered as a result of the measures against the spread of the coronavirus, attaching the supporting documents. The request will then be assessed by the State Bank and the Ministry of Trader and Industry (MPO).
  • The applicant submits the application through the electronic register ePodatelna
  • The subsidised loan agreement specifies the types of eligible expenses for which the loan can be used (e.g. wage costs, debts, etc.)
  • The beneficiary can then draw on the COVID-19 subsidised loan without specifying the purpose
  • The beneficiary of the aid must retain, for any future checks, all accounting documents on the costs/expenses provided by the COVID-19 subsidised loan related to eligible expenses under the subsidised loan agreement.
COVID-19 loan parameters

Funding parameters

  • No interest and no commission
  • Amount of the loan from 500 thousand up to 15 million CZK
  • Up to 90% of eligible project expenses
  • Expiration up to 2 years
  • Postponing instalments for up to 12 months

When can applications for funding be submitted?
Applications may be submitted at the branches of the State Development bank and Bohemian-Morava Guarantee from 16 March 2020. List of subsidiaries.

The support measure and its full Czech text.

Who can apply for a loan?
Loans are available to micro, small or medium-sized enterprises up to 250 employees or freelancers. Loans can be requested for purposes such as delay in fulfilment or a suspension or termination of a commercial agreement caused by measures to limit the spread of the coronavirus. Or, if the entrepreneur, after a planned contract, has found himself in a cancellation situation due to quarantine.

Individual requests will be judged by a committee of experts made up of representatives of the Ministry of Trade and Industry and the European Union.

How to apply for a loan

The loan can be requested via the Appropriate Excel Form. The application must include several attachments required for the overall evaluation of the applicant and his intentions. The full application can only be submitted via the ePodatelna  application - using the "Send for unregistered users" option. Next, you can communicate directly with the contact person who receives the request for processing.

Which documents to submit with the application

The business shall describe the main purpose of the loan required and shall further describe the damage he has suffered as a result of measures against the spread of the coronavirus. The amount of credit required should be based on the indication of this damage.

Commercial or manufacturing companies will need to submit information regarding the termination of (a) contract(s), refusal to comply, delaying the execution of the commercial contract, orders or other confirmation of the parties stating that the commercial contract has not been complied with.

The purpose of the financing is, for example, to cover the credits or wage costs of employees, which at present cannot be paid due to lower revenues. Therefore, lost revenue is not directly financed.

The requirements for using credit are that the applicant will be able to pay the so-called eligible expenses (mainly current operating expenses) specified in the support measure and in the subsidised loan agreement.

The project:

  • must be carried out on the territory of the Czech Republic
  • must meet the priority of the COVID-19 facilitated loan programme
  • does not provide for support for the management of a distribution network abroad or for other current costs related to export activities (customs, insurance, etc.) or aid subject to the use of household goods at the expense of imported goods
  • must not meet requirements of other public aid for expenses financed by a subsidised loan
  • was not completed before the date of the request for help; the completion of the project is defined as its physical completion, i.e. the use of the assets or the granting of the test permit etc.

Frequently asked questions:

  • Can travel agencies or hotels finance the loss of revenue from customer refunds in the event of a customer waiver and contract appeal?
    Yes, if one can quantify the suffered loss based on information of cancelled or deferred orders, the applicant should attach this documentation to the request
  • Is it possible to finance other operating expenses in the tourism sector if a cancellation is charged from a hotel in the Czech Republic or abroad due to the termination of the contract by the customer?
    Yes, if the damage can be quantified based on information about cancelled or postponed contacts, the applicant must submit these documents.
  • What document is required to demonstrate potential harm where it has not been possible to market its products on a given market (e.g. fairs, farmers' markets) and cannot be replaced by another short or medium-term contract?
    If the farmer (merchant, subcontractor, etc.) is able to prove that he has already had expenses for cancelled markets/fairs that should have taken place during the emergency period, he should present these documents (email, letter, etc.). Also, he must specify the activities he has carried out in previous years and in the application, quantify the approximate revenue that will represent his financial damage and the amount of the loan that would be required against that declared amount.
  • Is it possible to finance employee wages with credit?
    Yes, this is an eligible expense.
  • Is it possible to finance the purchase of machinery?
    No, the programme can only be used for operational financing, not for investments.
  • How much does the credit process cost?
    The procedure itself is not subject to any cost. The preparation and completion of the paperwork to collect the credit by the applicant are for his account.


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With special thanks to Nunzio Totaro.

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