- 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
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.
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