All set for implementation of new support measures, FinMin says

Finance minister Constantinos Petrides announced the launch of the implementation of three measures, under the government support program, to address the consequences of the coronavirus pandemic.

The measures concern a subsidy plan for small enterprises and self-employed persons, and subsidization of interest rates for new loans for a specified period of time and with a fixed maximum loan amount.

Petrides said that after the approval of two of the three measures by the European Commissions’ Competition Authority, people and enterprises will be able to benefit from the measures as of next week.

The first measure subsidizes interest rates for new housing loans, aiming to support households to get loans for private housing purposes. Petrides said that the measure, even if it applies for a certain period of time, is an appropriate, necessary and targeted solution under the current circumstances.

The measure concerns loans that have been concluded or will be repaid from 1 March 2020 to 31 December 2020, and will not exceed 300 thousand euros. The duration of the subsidy will be four years and will amount to 1.5% of the interest rate.

As of Monday, all interested parties can apply for a loan under the plan at ten credit institutions in Cyprus.

The second measure is an interest rate subsidy plan for new business loans to businesses, including self-employed workers, who face a lack of liquidity as a result of the pandemic. It concerns loans concluded or to be concluded from 1 March 2020 to 31 December 2020. Beneficiaries will be all companies and self-employed, provided that they are not considered problematic under the European Commission’s definition.

The interest rate will be subsidized for 4 years as follows: For the first two years the interest rate will be subsidized up to 3.5%, while for the third to fourth year the interest rate will be subsidized by 2% for small and medium-sized enterprises and 1.5% points for big businesses.

"We believe that this measure will contribute to the satisfaction of the needs in working capital but also for investments within the Republic. This plan was approved just yesterday, with the approval of the General Directorate of Competition of the European Commission and can be implemented immediately ", the finance minister said.

He also said that in the coming week, more information will be announced on the process, as well as a list of financial institutions that will participate in the plan.

The maximum amount of the loan, which can be granted per independent employee or company cannot exceed €800,000.

The third measure, a subsidy plan for small enterprises and self-employed persons, aims to cover part of the rent and operating expenses. The sponsorships apply to 50,000 very small and small-sized businesses and self-employed people who employ up to 50 employees.

The amount of the one-time sponsorship is distributed as follows: Independent employees and very small companies that fully or partly suspended their operations and were included in the special plans of the ministry of labour between April 13 and May 12 and employed:

(a) Up to one person: € 1250

(b) From 2 to 5 persons: € 3000.

(c) From 6 to 9 persons: € 4000.

(d) From 10 to 50 persons: € 6000

The Minister said that for the sponsorship, no application is required from the beneficiaries.

He also said that after yesterday’s approval of the plan by General Directorate of Competition the process of sending the checks to the beneficiaries will start next week.

Petrides noted that the total amount of the government’s support program includes fiscal interventions estimated at around 1.2 billion euros, and interventions to boost corporate liquidity of 1.7 billion euros.