Interest-free loans for Czech companies affected by coronavirus impact
In accordance with the decision of the Czech government, the state-controlled national bank for development („bank“) will be offering financial assistance to the Czech companies affected by the negative impact of the coronavirus. The bank will launch a coronavirus related programme for small and mid-sized Czech companies allowing them to apply for interest-free loans, free of any charge.
The “coronavirus loans” shall be granted in the amount from CZK 500,000 up to 15 million, however the amount is further limited to cover only 90 % of “eligible expenses” which means expenses incurred in direct connection with the coronavirus outbreak (including operational expenses). The loan shall be payable within 2 years of drawdown, repayment instalments can be delayed to start after a year.
The application process for the coronavirus loans starts on 1st of April and a high volume of applications is expected, therefore we highly recommend to file the application as soon as possible. The government has so far pledged total of CZK 600 million for this programme which can be exhausted quite quickly.
Some of the loan requirements
As already mentioned only small sized and mid-sized Czech companies are eligible to apply for the coronavirus loan. Aside from that many other conditions apply, for example the applicant shall not be indebted to the government authorities or its employees. The applicant shall also provide detailed description of the business including its history and financials, analysis of positive impact of participating in the project and estimate of the expenses after receiving a loan.
A special committee will be deciding on which applicants will receive the loans assessing the provided documents, there is no legal right to receive such coronavirus loan.
Please note that the abovementioned conditions and details are subject to changes as the situation develops rapidly, however we expect the basic conditions to remain unchanged.
In case you would be interested in more details or would like assistance with the application process do not hesitate to contact us.
For more information on this subject, please feel free to contact:
JUDr. Monika Rutland, partner
rutland & partners, law firm
tel: +420 226 226 026