Subsidy for Interest on New Business Loans as announced by the Ministry of Finance

The Ministry of Finance has provided details into the plan of subsidizing interest for new business loans on July 6th as follows:

The Ministry of Finance announces that the following Licensed Credit Institutions (APIs) have submitted a statement of participation in the Interest Subsidy Plan and have accepted the terms of the Plan as attached to this announcement.

A. Licensed Credit Institution
1 Ancoria Bank Limited
2 Astrobank Public Company Limited
3 Hellenic Bank Public Company Ltd
4 Cyprus Development Bank Public Company Ltd
5 Societe Generale Bank – Cyprus Ltd
6 Bank of Cyprus Public Company Ltd
8 Αlpha Bank Cyprus Ltd
9 National Bank of Greece (Cyprus) Ltd
10 Eurobank Cyprus Ltd

The Plan covers loans approved from 1/3/2020 to 31/12/2020, within the Republic, with any Licensed Credit Institution participating in the Plan and which concern needs of working capital and / or investments within the Republic with a maximum interest rate subsidy of four years. New loans that have emerged through restructuring are excluded. The Ministry of Finance invites all interested parties to contact the LCIs participating in the plan for their inclusion.

Beneficiaries of the Plan are all companies deemed as non-problematic on 31/12/2019 (Very Small, Small, Medium, Large and Independent Employees), by presenting a certificate from an approved accountant that they were no longer problematic (within the meaning of the general exemption regulation by category) on 31 December 2019.

The Plan also includes loans that will be approved until 31/12/2020 through the European Investment Bank, the Cyprus Entrepreneurship Fund and the Pan-European Guarantee Fund. Entrepreneurial loans are excluded, the interest rate of which is subsidized by other special government plans.

The Plan has been approved by the General Directorate of Competition of the European Commission on 25 June 2020. Based on the approval of the European Commission, the maximum loan amount that can be granted per self-employed person and business cannot exceed € 800,000.

Furthermore, the amount of loans to self-employed workers and businesses operating in agriculture, fisheries and aquaculture does not exceed € 120,000 per company operating in the fisheries and aquaculture sector or € 100,000 per company in the primary production of agricultural products.

The loan can be disbursed within 6 months from the date of approval of the loan by the relevant LCI. The subsidy period starts from the date of the 1st disbursement of the loan.

For the first two years, the interest rate subsidy will be as follows:

• Very Small, Small, Medium Enterprises and Independent Employees – up to 350 base units.
• Large businesses – up to 350 base units

From the third to the fourth year the interest rate subsidy will be:

• Very Small, Small, Medium Enterprises and Independent Employees – 200 basis points.
• Large businesses – 150 base units

The original announcement in Greek can be found Here in Greek.

– The final Plan can be accessed Here in Greek.
– The FAQ document can be accessed Here in Greek.
– The Affidavit Declaration to be completed can be found Here in Greek.