Government guarantee programme for companies now accepting applications
Press release 3 April 2020
To mitigate the economic impact of the coronavirus pandemic, the Government has set up a programme for emergency economic relief that involves state guarantees for loans to companies affected by the virus outbreak. Banks now have the opportunity to participate in the guarantee programme.
The government guarantee programme for companies entails that the central government takes on most of the risk when banks and credit institutions lend to companies that are financially impacted by the coronavirus but are otherwise viable. The participation of banks and other credit institutions in the programme and, to a greater extent, their granting of loans to viable companies is crucial in order for the aid to have an effect and help more businesses manage the crisis.
Starting today, banks and other credit institutions can apply to be able to utilise the central government loan guarantees.
This programme will be an important element in enabling more businesses to make it through the pandemic, but the situation is urgent if we want to reduce the long-term effects of the crisis on the economy. Now it is time for the banks to apply so that loans can be granted and the money can be put to use,” says Debt Office Director General Hans Lindblad.
Background: Mandate for guarantee programme for companies
- The Government has given the Swedish National Debt Office a mandate to provide loan guarantees for a maximum of SEK 100 billion, which will primarily go to loans for small and medium-sized enterprises in Sweden that are financially impacted by the coronavirus but are otherwise viable. The central government guarantees up to 70 percent of the loan amount.
- The Debt Office provides the guarantee to the credit institutions – which, in turn, issue guaranteed loans to the companies. Companies can apply for a loan with a state credit guarantee by contacting their bank.
- In order for the banks to be able to grant loans with a state credit guarantee, a guarantee agreement must be established between the Debt Office and each participating credit institution. As of today, it is possible for credit institutions to apply to participate in the guarantee programme.
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