In order to mitigate the effects of COVID-19, economic operators will have access to loans for working capital and credit holiday guarantees

19-03-2020

The Cabinet of Ministers at its meeting of March 19 supported the support programmes developed by the Ministry of Economics in cooperation with the financial institution Altum and the support programmes developed by the Financial Industry Association in order to provide support in the form of working capital and credit loans to entrepreneurs whose activities are adversely affected by the spread of the coronavirus COVID-19.

 

“The emergency situation and the tightened security measures introduced to limit the spreading of COVID-19 affect the majority of entrepreneurs and Latvia’s economy in general. Most entrepreneurs point out that they are experiencing lack of working capital and difficulties in covering their credit liabilities. In order to address this, the Ministry of Economics is preparing a number of support measures. The government’s decisions adopted today focus on tackling the lack of working capital, as well as mitigating the risks associated with job cuts, forced downtime and liquidation of business as a result of the consequences caused by COVID-19,” emphasises Deputy State Secretary of the Ministry of Economics Raimonds Aleksejenko.

 

Altum’s working capital loans will be made available to economic operators (both small, medium-sized and large enterprises) affected by the spread of the coronavirus COVID-19. The loan will be available in situations where credit institutions have stopped financing or do not grant new working capital loans or credit facility lines, and will be provided for a period of up to 3 years. Loans amounting to 200 million EUR in total will be granted within the programme.

 

Since the spread of COVID-19 has affected the activities of the tourism sector in Latvia the most, the programme will allow businesses in the tourism sector to reduce the interest rate of the loan by 50% for small and medium-sized enterprises or by 15% for large enterprises in specific tourism (and related) sectors.


Altum will also provide loans for investment, financing of working capital, including financing of credit limits (credit facility lines and overdraft), financial leasing and financial leasing limits for companies whose activities have been negatively affected by the spread of the coronavirus COVID-19. 

 

Altum’s credit holiday guarantees will be available to companies in all sectors (excluding restrictions on state aid regulations – gambling, financial intermediation, arms trafficking, etc.) in situations where Covid-19 has made it impossible to make full or partial credit payments (terminated supply contracts, significant drops in sales, suspended production due to no supplies, etc.), but the credit institution agrees to postpone payments of the principal amount of the loan or leasing. 

 

Within the programme, companies will be provided with credit holiday guarantees for existing investment and leasing financial services, as well as for new working capital financial services or existing working capital financial services. The guarantee will cover up to 50% of the amount of the financial service (at the time of granting the balance guarantee) and will have a maximum period of 2 years.

 

The guarantee programme will help provide loans to economic operators amounting to 715 million EUR.


More information on the new support programmes for companies affected by the spread of the coronavirus COVID-19 is available on the website of the financial institution Altum. 

Last update:    25-05-2020