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Coronavirus - Overview of governmental economic support – Global

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Please note that further information is expected and we will update this note when this is available.

Set out below is a summary of measures that have been announced by governments in various jurisdictions in response to the COVID-19 outbreak.  Please note that these measures are subject to eligibility criteria which is detailed further on in the note.

Jurisdiction list


Summary table


Loans backed by Government Guarantees

Additional Funding

Loan Repayment Deferral


Belgium Guarantee scheme for all new loans and credit lines with a maximum term of 12 months backed by the government and the financial sector for a total amount of EUR 50 billion. No announcements to date The financial sector is committed to providing viable companies, self-employed professionals as well as individuals support by deferring payment obligations (principal and interest) of their loans - free of charge - until 30 September 2020. The different regions in Belgium took separate additional measures.


No announcements to date

Low cost special purpose loans to support companies responsible for key materials necessary to control the epidemic.

Encouragement by the People’s Bank of China and the China Banking and Insurance Regulatory Commission to provide micro, small and medium sized enterprises with a deferral of loan repayments.


Reduction in reserve requirements for banks.




A EUR 300 million state guarantee fund to support corporate credit launched on 25 March 2020.


Provision of grants to small businesses, the self-employed and micro-enterprises through the EUR 1 billion solidarity fund financed by the State and the local authorities.

The French public investment bank Bpifrance is offering additional funds and loans.

The French banking federation has announced, amongst other things, capital repayment deferral for up to six months and removal of penalties and costs to extend loans.


Extension of payment terms for social contributions/direct taxes and potential for write off of some liabilities.



An extension of the current government guarantee schemes to cover working capital financings and investments up to certain limits.

Additional loans available from the German development bank KfW.

Additional guarantees to be provided by German guarantee banks.


No announcements to date

Planned suspension of certain director’s liabilities and duties around insolvency.

Establishment of an economic stabilisation fund.

Changes to consumer loan agreements.



The Credit Guarantee Scheme will be available to eligible small and medium sized businesses.

A Strategic Banking Corporation of Ireland Working Capital scheme is available for loans of up to EUR 1,5 million with up to the first EUR 500,000 being unsecured.

Loans from MicroFinance Ireland will be increased.

A Rescue and Restructuring Scheme to assist vulnerable businesses.

Some deferrals may be available, but will be at the lender’s discretion.

A reduction in the Irish Central Bank’s capital buffer to free up capital.


A guarantee fund for small-medium enterprises has been extended to 80% of a loan of no more than EUR 1,5 million.

No announcements to date

Suspension for 12 months of payments due to Invitalia for financings granted to eligible enterprises.

The Italian Banking Association have encouraged deferral of loan payments for up to one year and extension of loans.

Suspension of certain payments due such as taxes to the tax authority and property taxes.


An extension of the existing corporate guarantee scheme for midsized and large companies.

An additional guarantee scheme for midsized companies.

No announcements to date

Certain lenders have announced an automatic 6 month deferral of repayment obligations for midsized companies.

Surety scheme for midsized agricultural companies.

Further support for starter companies who have funding through Qredits.


Establishment of a state guarantee credit facility for small and medium enterprises, where the state will guarantee up to 90% of eligible loans.


Establishment of a state bond fund to invest in mid- sized and larger companies.

No announcements to date

Reduction in capital buffers for financial institutions.

Deferred payment of national wealth tax and payment of tax for quarter 1 of 2020.

Reduction in VAT rates and deferred payments of VAT and employers’ national insurance contributions.


The Ministry of Economic Affairs and Digital Transformation will provide guarantees for financing to companies and the self-employed.

The Spanish government will provide additional guarantees for the financing of working capital required by unlisted export companies.

New financing through the Official Credit Institute to be available.

Loans to be provided for research and development projects for small and medium sized businesses.

No announcements to date

Exemption from stamp duty for any contractual amendments to loans and mortgage loans.

Restrictions on transactions relating to foreign direct investments.


Government guarantee 70 % of loans totalling up to SEK 75 million per loan.

Guarantees of up to SEK 5 billion to airline companies.

SEK 500 billion in loans to banks, to be on-lended to companies.

Capital contribution of SEK 3 billion to state owned venture capital company Almi Företagspartner AB.

Increased credit guarantees totalling SEK 500 billion from the Swedish Export Credit Agency.

Swedish Export Credit Corporation’s credit framework increased from SEK 125 billion to SEK 200 billion.

Up to 12 months deferral possible on new loans which are backed by Government guarantees.

Reduction of social security contributions for employers.

Temporary change to rules for tax allocation reserves.

Government support for short-term layoffs.

Opportunities for companies to defer tax payments.

Temporary decrease in rental costs in vulnerable sectors.


The government will provide guarantees of up to 80% through the Coronavirus Business Interruption Loan Scheme and Coronavirus Large Business Interruption Loan Scheme.

A new Covid Corporate Financing Facility.

Grants between £10,000 - £25,000 are available to eligible businesses.

No government measures have been enacted and so this will be at the discretion of the lender.

A deferral of VAT.

A business rates holiday for certain sectors.

Support to pay salaries of employees who are unable to work.

US Loans and loan guarantees to businesses, States, and municipalities that do not exceed $500 billion in the aggregate, including $17 billion for businesses critical to maintaining national security, and an additional $367 billion to small businesses. $280 billion to hospitals and local and state municipalities dealing with medical equipment shortages resulting from the COVID-19 crisis. Loan and payroll tax deferrals depending on various factors.  Most deferrals lasting between six months and one year; and some lasting until December 31, 2022. Comprehensive stimulus package totaling $2 trillion in relief.

Country details


On 22 March 2020, Febelfin (the Belgian federation of the financial sector) and the National Bank of Belgium announced a series of measures to support lending to Belgian companies and individuals, supported by the Belgian federal government (Minister of Finance) and the Belgian financial sector. These measures focus on two aspects:

1)      The financial sector is committed to providing viable non-financial companies, self-employed professionals as well as individuals (mortgage borrowers) facing payment problems due to the corona crisis support by deferring payment obligations (principal and interest) of their loans - free of charge - until 30 September 2020. In addition, the financial sector has agreed not to convert any more mortgage mandates into mortgage registrations. In the same context, the sector organisation for insurance companies Assuralia reached an agreement , with the help of the National Bank, the FSMA and the federal government on the suspension for payment for individuals of the debt balance insurance (‘schuldsaldoverzekering’) premiums, and on the fire insurance premium for those wo have become unemployed.

Presumably, “viable” companies will be those companies which did not have any payment delays on 1 February 2020; or which had less than 30 days’ payment delays on 29 February 2020; and which do not fall within the active credit restructuring.

2)      The federal government will activate a guarantee scheme for all new loans and credit lines with a maximum term of 12 months granted by banks to viable non-financial businesses and self-employed professionals.

The guarantee scheme will have the following characteristics:

  • It will involve a total guarantee amount of EUR 50 billion.
  • All new additional credits and credit lines with a maximum maturity of 12 months (explicitly excluding refinancing credits) granted until 30 September 2020 will be covered by the guarantee scheme.
  • After the end of the guarantee scheme, the amount of losses incurred on the credits under the guarantee scheme will be assessed. The burden sharing between the financial sector and the federal government will be as follows:
    • Borne entirely by the financial sector: the first 3% of losses on the total new loans;
    • Borne 50/50 by the financial sector and by the federal government: losses between 3% and 5%.
    • Borne 80% by the federal government and 20% by the financial sector: losses higher than 5%.

The National Bank of Belgium, together with Febelfin, will set up a monitoring system to monitor the guarantee scheme as well as the financial sector's commitments.

Link to announcement here (available in Dutch and French).

As for the different regions in Belgium, we refer to the following websites:

For the Region of Flanders: Under normal guarantee schemes, companies can have up to 75% of new financing agreements guaranteed by the Flemish government, in exchange for a one-off premium of 0.5% of the total amount. Due to the corona crisis, this premium is reduced to 0.25% of the total amount. In addition, companies can have a bridging loan guaranteed for existing debts for up to 12 months instead of 3 months. Please see the website of Flanders for further details and additional measures.

For the Walloon Region: In order to support companies which are in difficulty due to coronavirus, it was decided to set up an extraordinary fund of EUR 233 million to provide a single, lump-sum compensatory indemnity for SMEs and the self-employed professionals directly and indirectly affected by the decisions taken by the National Security Council. The application platform will be online on 27 March 2020 and actual payments are foreseen as from mid-April. Please see the website of the Walloon Region for further details and additional measures/

For the Region of Brussels Capital: Strong support for the cash flows of affected companies by granting (via the Brussels Guarantee Fund) public guarantees on bank loans, for a total amount of EUR 20 million. Please see the website of Flanders for further details and additional measures.

Contact us

Koen Devos, Partner
Caroline Schell, Associate

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Since the COVID-19 outbreak, the People’s Bank of China (the “PBOC”) and the China Banking and Insurance Regulatory Commission (the “CBIRC”) have been responding with a series of banking and finance measures to support businesses in the People’s Republic of China (the “PRC”) that have been affected by COVID-19.

Reduction in reserve requirement ratio

Most recently, in order to support economic growth and reduce financing costs, the PBOC has decided to reduce the reserve requirement ratio by 50 basis points (bps) for all banks in the PRC. An additional 100 bps cut would also be allowed for qualified city commercial banks. PBOC expects long term funds of RMB 550 billion would be released by this round of ratio reduction.

Bank to bank financing

In late January, the PBOC also launched a special purpose bank-to-bank financing programme to provide a total of RMB 300 billion low-cost special purpose loans to 9 national banks and a number of local banks in 10 provinces and municipalities, to support enterprises that are responsible for the supply of key materials and daily necessities for epidemic prevention and control. In February, the PBOC has agreed to issue another series of bank-to-bank loans, with a total amount of RMB 500 billion, to support the resumption of production and operation of businesses in the PRC. The funds would also be used by national and local financial institutions to, among other things, support the economic growth of less developed areas in the PRC, and provide liquidity to industries and sectors that are more seriously affected by the epidemic.    

Deferral of Loan Repayments

The CBIRC and the PBOC have also jointly issued the Notice regarding the Implementation of Temporarily Deferral of Loan Repayments by Micro, Small and Medium-sized Enterprises (the “Notice”). The Notice encourages banks and financial institutions to provide a temporary extension to financially difficult micro, small and medium-sized enterprises for the repayment of principal which are due from 25 January 2020, and payment of interests which are due from 25 January to 30 June 2020. According to the Notice, due date for the payment of principal and interests can be extended to 30 June 2020, with no penalty interests chargeable. Further extension could be granted by local financial institutions for micro, small and medium-sized enterprises that have been severely affected by the epidemic yet have a positive growth prospects, on a case-by-case basis.

The banking authorities have also requested banks and other financial institutions to assist companies within certain sectors and industries, including health and medical care, manufacturing, transportation, and logistics, through a series of measures. The CBIRC has, for instance, asked banks to allow delays in repayment of loans owing by toll roads operators, which have been hit by the toll fee exemption policy implemented by the PRC government during the outbreak. The CBIRC has also instructed banks and credit providers in the rural areas to take an active role in satisfying the financial needs of producers and manufacturers of agricultural products.

Contact us

Michael Yau, Head of Banking & Finance Asia

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On 16 March, the President of the French Republic announced a number of measures to help French businesses facing the impact that COVID-19 and the accompanying social distancing measures is and will continue having on them.  These measures are the following:

1)    payment extensions of social and/or tax liabilities (social contributions, direct taxes);

2)    in the most distressed situations, direct tax write-offs decided on a case-by-case basis;

3)    moratorium on utilities and rental payments for the smallest distressed SMEs;

4)    provision of grants of EUR 1,500 for all small businesses, self-employed and micro-enterprises through the EUR 1 billion solidarity fund;

5)    mobilization of the State to guarantee credit facilities needed due to the COVID-19 outbreak up to EUR 300 billion;

6)    support from the State and the Banque de France (credit mediation) to negotiate with its bank a rescheduling of bank loans;

7)    maintaining employment in businesses through a simplified and strengthened state cover for partial activity (chômage partiel);

8)    support for the handling of a dispute with customers or suppliers by the Business Ombudsman; and

9)    the recognition by the State and local authorities of Coronavirus as a case of force majeure for their public procurement. As a result, for all State and local government procurements, delay penalties will not apply.

These measures, and further emergency economic and financial measures, are in the process of being adopted/implemented.

The State guarantee relating to banking credit facilities, the measures put in place by the public investment bank, Bpifrance Financement SA (Bpifrance) and the support measures announced by banks are detailed below.

State guarantee relating to banking credit facilities

The Government is implementing an exceptional guarantee fund of up to EUR 300 billion to support corporate credit. It is available since 25 March 2020.

The guarantee will support treasury loans made by credit and financial institutions from 16 March 2020 until 31 December 2020 to companies whatever their size (except in the financial sector and real estate civil companies) registered in France.

The guarantee will only be available for loans that meet a set of conditions which are:

1)    the provision of a deferred amortization of at least one (1) year and the possibility, left to the discretion of the sole borrower, to amortize the loan over an additional period of 1 to 5 years;

2)    the loan may finance up to 25% of turnover excluding VAT in 2019 (i.e. one quarter of activity) and, for newly created or innovative companies, this ceiling is set at 2 years of payroll;

3)    not taking any other security or guarantee (except when they are granted to companies in France employing more than 5,000 employees or generating sales of more than EUR 5 billion); and

4)    not being accompanied by a reduction in the assistance provided by the lender to the concerned company as compared to their level on 16 March 2020 (possibility to refinance existing loans).

Furthermore, the characteristics of the guarantee will be as follows:

1)    the guarantee is remunerated between 0.25% and 0.50% during the first year and between 0.50% and 2.00% during the amortization period;

2)    it shall cover but:

  • 90% of the loan for companies with less than 250 employees and EUR 1.5 billion turnover;
  • 80% of the loan for companies with more than 5,000 employees and less than EUR 5.0 billion turnover;
  • 70% of the loan for companies with more than 5,000 employees and more than EUR 5.0 billion turnover;

3)    it is acquired only after a grace period of two months;  and

4)    it cannot benefit companies subject to insolvency proceedings (safeguard, rehabilitation and liquidation proceedings).

In order to meet a potentially large and urgent demand, only loans granted to companies with more than 4,999 employees or whose annual turnover exceeds EUR 1.5 billion will be granted, on a case-by-case basis, by order of the Minister of the Economy. For all other companies, they should contact their bank which will examine the company’s application and give a pre-approval upon review that the requirements above are met. The company will then have to connect here to obtain a unique identification number from Bpifrance which will have to be communicated to the bank.

Banks have undertaken to swiftly review all the applications they will receive. Furthermore, the cost of the loan should be limited to each bank's own financing cost (interest rate), without margin, plus the cost of the State guarantee.

Bpifrance emergency plan

Since 2 March 2020, the French public investment bank, BpiFrance, has organised an emergency plan to support very small enterprises, SMEs and mid-cap companies affected by the COVID-19 outbreak. It includes the following measures:

1)    a Bpifrance guarantee fund. Subject to a limit of EUR 5 million for SMEs and EUR 30 million for mid-cap companies (meaning with less than 5,000 employees or EUR 1.5 billion turnover), BpiFrance guarantees up to 90%:

  • for companies that are granted a 2 to 7-year credit facility to consolidate short-term indebtedness in the medium term; and
  • for short term committed indebtedness, if their bank confirms the committed indebtedness over a period of 12 to 18 months,

2)    extending the traditional guarantees of investment loans. No management fees will be claimed for companies impacted by COVID-19 in the event of refinancing by the banks;

3)    the refinancing of medium and long-term credits for Bpifrance customers. No intervention is required from Bpifrance's corporate clients. Rescheduling will be automatically completed;

4)    the implementation of the "Key Loan" (“Prêt Atout”). The loan aims to strengthen the cash flow of seriously distressed companies due to the COVID-19 outbreak. This loan does not address structural cash flow problems.  This assistance applies to SMEs and mid-cap companies with at least 12 months of activity.  For SMEs, this loan can be up to EUR 5 million and EUR 30 million for mid-cap companies. It is granted for a period of 3 to 5 years with deferred amortization; and

5)    the implementation of the "Bounce Loan" (“Prêt Rebond”). In collaboration with the regions, this loan is granted to very small enterprises, SMEs and mid-cap companies. The amount can range from €10,000 to €300,000.

Bpifrance has committed to respond within five (5) working days following the solicitation of the guarantee by the lending bank. As part of Bpifrance's emergency plan, a green number has been set up to facilitate dialogue with businesses: 0 969 370 240 and all information and application forms are also available on Bpifrance website.

French banks commitments

French banks have been prompted by the President and the French government to participate in the national and European effort to deal with the economic crisis caused by COVID-19. In concrete terms, several measures, articulated with the exceptional public support schemes for businesses, have been decided by banks and announced by the French banking federation – (“FBF”) (Fédération Bancaire Française) on 15 March 2020:

1)    the introduction of expedited credit appraisal procedures for tense cash situations within 5 days and special attention to distressed companies;

2)    deferring credit repayments for businesses for up to six months;

3)    removing penalties and additional costs relating to the extension  of corporate maturities and credits; and/or

4)    relaying government measures: in the context of exchanges with clients, communication and explanation of the public support measures (deferral of social or fiscal deadlines, public guarantee mechanism such as BPIfrance...).

As regards the extension of the credit repayments for businesses for up to six months, the press release of FBF does not give details regarding the businesses benefiting from this measure but reminds that, in general, banks will look closely at the individual situations of their merchant, professional, small and medium-sized business customers, impacted in the sectors most directly exposed and will seek solutions that are best suited to short-term financing needs.

Accordingly, if no more consensus is found between the banks, there may be some discrepancies in the manner they will apply this commitment, taking however into account that the banks are under pressure to find agreements with their customers since the French government has communicated its support to the borrowers and invited them to contact the Banque de France (and more specifically the credit mediation) to negotiate a rescheduling of their bank loans if need be.

Contact us 

Sophie Perus, Partner

Delphine Baudouin, of counsel

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Planned suspension of obligation to file for insolvency, director’s liabilities in Covid-19-cases and restrictions of future claw-back rights

Germany will suspend the obligation to apply for insolvency for Corona-related cases and attached liability of company directors.

Pursuant to the draft bill of the "COVID-19 Insolvency Suspension Act – COVInsAG" as of 23 March 2020 ("COVInsAG"), the obligation to file for insolvency for companies affected by the corona epidemic will be suspended until at least 30 September 2020 (subject to a longstop date of 31 March 2021) where the duty to file for insolvency under normal circumstances would have arisen on or after 1 March 2020 (the “Suspension Period”). This also has an effect on the director’s liabilities attached to this obligation. Furthermore, the bill also restricts potential claw-back rights of a future insolvency administrator.

Suspension of the obligation to file for insolvency

1)    The suspension only applies if the debtor’s current insolvency is a consequence of the Corona pandemic and if there are prospects to overcome the illiquidity. If the debtor is currently illiquid but was not illiquid on 31 December 2019, the bill provides for a legal presumption that the debtor’s current insolvency situation is a consequence of the Corona pandemic and that there are prospects to overcome the debtor’s current illiquidity.

2)    The aim of the proposed COVInsAG is to give damaged companies and their representatives in the corporate bodies time to conduct the necessary financing and restructuring negotiations to avert insolvency in the current particularly tense situation.

3)    Directors must be able to demonstrate that the company was not illiquid on 31 December 2019 (as the legal presumption only applies in this case), companies will need to set-up and demonstrate liquidity, showing that the insolvency situation did not occur before 31 December 2019. The majority of companies are likely to rely on an accountant and should in such case also instruct their accountant to document and plan a restructuring scenario to be able to demonstrate the prospects of the restructuring.

4)    In line with the suspension of the obligation to file for insolvency, the bill also restricts the right of creditors to file for the opening of insolvency proceedings over the assets of a debtor. For the period of three months from a date in late March (still to be specified during the legislative process), an application by a creditor will only be successful if the debtor was already insolvent on or before 1 March 2020.

Suspension of liability

1)    The draft of the the CorInsAG also suspends the liability of managing directors for any payments made after the occurrence of an insolvency event and is implemented consistently in accordance with the regulations on the suspension of the obligation to file for insolvency.

2)    At the same time, it is becoming apparent that payments made during the Suspension Period, which serve to maintain business operations will be regarded as compatible with the requirements of emergency management (Sections 64 sentence 2 GmbHG/ 92 para. 2 sentence 2 AktG) which will widely prevent liability of the management when making ongoing payments for rents, leases, salaries and other required payments.

Restrictions of future claw-back rights

1)    In line with the suspension of the obligation to file for insolvency, the bill also restricts claw-back rights of a future insolvency administrator in case of a future insolvency proceeding.

2)    If new loans are provided to the debtor or if the creditor is granted new securities for his loan during the Suspension Period, repayments on these loans which occur until 30 September 2023 and the provision of these securities are not deemed to be to the disadvantage of the other creditors and will therefore not be subject to claw-back by a future insolvency administrator. This also applies to shareholder loans.

3)    Payments or the delivery of goods or services to a creditor during the Suspension Period, to which the creditor was entitled, shall not be subject to claw-back rights by a future insolvency administrator. This shall not apply if the creditor knew that the debtor’s restructuring and financing efforts were not suitable to overcome its current illiquidity. The burden of proof for the latter is therefore borne by the insolvency administrator.

The bill is currently scheduled to be discussed and adopted by the Bundestag and Bundesrat later this week.

Liquidity support

The Federal Government has adopted a multi-billion Euro protection shield for enterprises to avoid a liquidity shortage because of the COVID-19 pandemic. Enterprises shall be protected with new and unlimited liquidity measures.

Extension of existing liquidity support programmes

Existing liquidity support programmes will be expanded in order to facilitate access to attractive loans for investments and working capital:

1)    Loan assistance schemes provided by the German development bank KfW through the enterprises’ relationship bank:

a)    Enterprises that are more than 5 years on the market

“KfW Entrepreneur Loan” (“KfW-Unternehmerkredit”)

  • For large enterprises (more than 250 employees, more than EUR 50 million turnover or more than EUR 43 million balance sheet total) up to 80% risk assumption (Risikoübernahme) (programme no. 037)
  • For small and medium-sized enterprises (about 250 employees and up to EUR 50 million turnover) up to 90 % risk assumption (Risikoübernahme) (programme no. 047)

b)    Enterprises that are less than 5 years on the market

“ERP Start-up Loan – Universal” (“ERP-Gründerkredit – Universell”)

c)    Enterprises that are at least 3 years on the market

  • For large enterprises (more than 250 employees, more than EUR 50 million turnover or more than EUR 43 million balance sheet total) up to 80% risk assumption (Risikoübernahme) (programme no. 075)
  • For small and medium-sized enterprises (about 250 employees and up to EUR 50 million turnover) up to 90 % risk assumption (Risikoübernahme) (programme no. 076)

This shall also be applicable for enterprises that are less than 3 years on the market (large enterprises programme no. 073 and small and medium-sized enterprises programme no. 074).

Applications can be made at the enterprises’ relationship bank in an amount of up to EUR 1 billion per group of companies. The maximum loan amount is limited to:

  • 25% of the annual turnover in 2019; or
  • 2x the wage costs of 2019; or
  • the current financing needs for the next 18 months for small and medium-sized enterprises or 12 months for large enterprises; or
  • 50% of the total debt of the enterprise for loans over EUR 25 million.

d)    KfW “Loan for Growth"

The conditions for the "KfW Loan for Growth" („KfW Kredit für Wachstum“) will be eased by increasing the risk assumptions (Risikoübernahmen) and the eligibility threshold for large enterprises to a turnover of up to EUR 5 billion (previously: EUR 2 billion) and participations in syndicated financings will be provided without a restriction to a specific business or sector (previously only possible in the sector of innovation and digitisation). Risk assumptions by the KfW will be increased to up to 70% (previously 50%) (programme no 290).      

Guarantees provided by the German guarantee banks (Bürgschaftsbanken)

The maximum guarantee amount will be doubled to EUR 2.5 million. In order to accelerate the provision of liquidity, decisions on granting a guarantee up to an amount of EUR 250,000 can be made by the guarantee banks independently and within 3 days.

Parallel federal-state guarantees provided by the large guarantee programme

This programme is a cooperation between the Federal Government, the State Development Banks (Landesförderbanken) and the guarantee banks and such measures are covered by the state aid regulations. Such programme has so far been limited to enterprises in economically underdeveloped regions and will now be available for enterprises outside these regions to cover working capital financings and investments with a guarantee requirement of minimum EUR 50 million and with a guarantee cover of up to 80%.

Additional KfW special programme – Syndicate financing in an amount of at least EUR 25 million

KfW will participate with private banks in syndicated financings of investments and working capital (programme no. 855) for medium-sized and large enterprises, where KfW will cover up to 80% of a loan (Risikoübernahme) provided that it is not covering more than 50% of the total debt of a company.

The KfW risk share amounts to at least EUR 25 million and is limited to:

  • 25 % of the annual turnover in 2019; or
  • 2x the wage costs of 2019; or
  • the current financing needs for the nex 12 months.

Optionally, all banks participating in the syndicate can be refinanced by KfW.

Please note that all applications for KfW loan assistance schemes need to be submitted via the enterprises’ relationship bank which will then enter into a cooperation with KfW in this respect. Applications can be submitted from 23 March 2020, provided that the enterprise was not in financial difficulties before 31 December 2019.

Establishment of an economic stabilisation fund

The Federal Government will establish an economic stabilisation fund (“WSF”) which is to provide state guarantees for the liabilities of enterprises. The WSF would be authorised to "take grant guarantees up to EUR 400 billion in order to eliminate liquidity bottlenecks and support refinancing on the capital market". The proposal is that the term of the guarantees and the liabilities to be covered may not exceed 60 months, but this is still to be confirmed,  meaning that the amount and term of the guarantees have not yet been clarified.

In contrast, EUR 100 billion has already been fixed for direct investments enterprises. Thus, the Ministry of Finance is authorized to "take out loans up to 100 billion Euros" for the WSF to cover expenses and measures.

The WSF is to provide a further EUR 100 billion in loans from KfW, for the programmes as set out above.

Further updates to be provided once information is available.

Change of law: Law for the Mitigation of the consequences of the COVID-19 pandemic

The Federal Government is currently working on a Law for the Mitigation of the consequences of the COVID-19 pandemic in the areas of Insolvency, Corporate, Civil and Criminal Procedure Law.

With regard to consumer loan agreements entered into before 15 March 2020, claims for repayment, amortisation and interest which are due between 1 April and 30 June 2020 shall be deferred by 3 months from their respective due date if the borrower suffers a decline of income due to the extraordinary circumstances caused by the COVID-19 pandemic, making payments unbearable for the debtor, specifically in cases where the debtor’s means for living or the existence of business are endangered.

Further, creditors’ termination rights due to a payment default or a significant deterioration of the financial circumstances of the consumer or the value of a security provided for the loan are suspended until the expiry of the deferral period.

If the creditor and consumer cannot agree on an arrangement for the time period after 30 June 2020, the term of the loan will be extended by 3 months.

The above shall not apply if the creditor can claim that a deferred payment or the suspension of the termination right would be unbearable for the creditor, taking into account all circumstances of the individual case.

Please note that these provisions are only applicable to consumer loan agreements. For loan agreements between entrepreneurs, the statutory provisions continue to apply. However, the Federal Government may, in an accelerated procedure, extend the personal scope of the provision to micro, small and medium-sized enterprises.

Contact us      

Christian Hilpert, Partner

Stefan Schramm, Partner

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Specific Initiatives

The Irish government has been working with banks and regulatory organisations to support individuals and businesses impacted by Covid-19.  To date the following specific measures have been announced:

  • a €200m Strategic Banking Corporation of Ireland (SBCI) Working Capital scheme for eligible businesses impacted by COVID-19. Loan of up to €1.5m will be available at reduced rates, with up to the first €500,000 unsecured. The terms and conditions will be available on the SBCI website when published;
  • a €200m Package for Enterprise Supports including a Rescue and Restructuring Scheme available through Enterprise Ireland for vulnerable but viable firms that need to restructure or transform their business;
  • the maximum loan available from MicroFinance Ireland will be increased from €25,000 to €50,000 as an immediate measure to specifically deal with exceptional circumstances that micro-enterprises – (sole traders and firms with up to nine employees) - are facing. Applications can be made through the MFI website or through a local enterprise office; and
  • the Credit Guarantee Scheme will be available to eligible SME’s impacted by COVID 19. Loans of up to €1m will be available at terms of up to seven years.

General Principles

The Irish Government and the banking sector have confirmed that they will adopt a coordinated approach to borrowers whose income has been impacted by Covid-19.  The range of supports proposed are customer focused and cater for the different impacts of Covid-19 on each individual customer and include:

  • extensive supports for small and medium enterprises.  The banks are working to ensure a wide range of credit, cashflow and supply chain supports are offered to businesses who are trying to manage pressures arising from Covid-19;
  • the adoption by the banks of a customer focussed approach to all businesses with a wide variety of tailored support including extension to credit lines, risk guarantees and trade finance;
  • flexible arrangements including a payment break for mortgages and other loans.  Customers affected by Covid-19 must contact their bank to discuss what flexibility is available;
  • support for the buy-to-let bank customers with tenants affected by Covid-19;
  • domestic retail banks to defer enforcement proceedings for three months;
  • limit on contactless card payments increased from €30 to €50; and
  • stamp duty charge on credit cards to be pushed out to July 2020.

Fiscal changes

The Irish Central Bank has reduced its capital buffer from 1% to 0% to free up capital that can be used to provide credit and restructure and extend the loans of bank customers, both individuals and small and medium enterprises.  It is anticipated that this will free up in excess of €1 billion of bank capital and has the potential to support approximately €13 billion euro of restructured lending to bank customers who need assistance. 

When this is combined with the relaxation of political guidance and the capital conservation buffer by the European Central Bank, this will ensure that banks have significant resources at their disposal to support borrowers.

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Piaras Power, Head of Banking & Financial Services Ireland


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Italy was the first European Country to face the COVID-19 emergency. Therefore, the Italian Authorities have unanimously cooperated in order to take all the necessary measures and steps to mitigate the spread of the mentioned virus. The legal and private acts mentioned below are only a brief summary of the most important interventions in relation to the economic and financial implications of this global emergency.

The first Presidential Decree with economic measures for the “red zone”

Among the first legal initiatives, the Presidential Decree approved by the Italian Government on 28 February 2020 (which came into force on 2 March 2020), provided emergency measures to contain the transmission of the virus and its consequences on the national economy.

With reference to the economic measures, the following have been the most relevant for the small-medium enterprises[1] headquartered in the so called “red zone”[2]:

  • suspension until 30 April 2020 of the payments due to certain authorities, such as tax demands issued by the tax authorities and the amounts due to local authorities in relation to property taxes; and
  • suspension for 12 months (starting from 2 March 2020) of payments due to Invitalia for financings granted to eligible enterprises[3].

The Civil Protection Order: a moratorium to real estate and commercial loans

Following the aforementioned Presidential Decree, the President of Civil Protection provided for additional measures and, more specifically, for a debt moratorium. According to Order no. 642 of 29 February 2020, the borrowers are entitled to defer (until the end of the state of emergency) the payment of instalments of loans granted by banks and/or credit institutions for the purposes of (i) the purchase of real estate properties or (ii) the financing of commercial and business (including agricultural) activities.

The role of the private players: the addendum of the Italian Banking Association

It must be said, that not only are the public authorities playing a role in facing the COVID-19 emergency but private operators and associations have also intervened. On 7 March 2020, the Italian Banking Association drafted an addendum deemed to entitle small-medium enterprises to request either (i) a moratorium to instalment payments (up to one year) or (ii) an extension of the loan (no longer than the period between the request date and the repayment date and, for short term loans, no longer than 270 days).

The so called “Cura Italia” Decree

The most recent and important legal act is Presidential Decree no. 18 of 17 March 2020, i.e the “Cura Italia” Decree, which provided targeted measures for small-medium enterprises owing debt to banks and/or financial intermediaries. Those small-medium sized enterprises that suffered a temporary shortage of liquidity as a direct consequence of the COVID-19, upon self-certification, may apply for the following relief (provided):

  • outstanding lines of credit (either used or unused) shall become irrevocable until 20 September 2020;
  • bullet loan and leasing payments to be reimbursed before 30 September 2020 shall be automatically extended until 30 September 2020 under the same terms (this also applies to any security or guarantee assisting the loan); and
  • with respect to mortgages and other loans repayable in instalments, the payment of instalments falling due before 30 September 2020 shall be deferred until that date, and the repayment date shall be extended without additional costs for either party. Small-medium enterprises may only request the suspension of principal payments.

In addition to the above, pursuant to the Cura Italia Decree, the role of the Central guarantee fund[4] for the small-medium enterprises (Fondo centrale di garanzia per le PMI) has also been strengthened. The Central guarantee fund will, inter alia, grant a direct guarantee covering up to the 80% of the loan (for a total amount not exceeding EUR 1,5 million for each enterprise) to the lenders, for no charge. Moreover, those enterprises which requested the extension of the loan will benefit from the same extension for the guarantees granted by the Central guarantee fund.

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Marco Franzini, Partner

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On 17 March 2020, the Dutch government announced a series of financial measures to help Dutch midsized and large companies to continue their businesses while facing uncertainties and financial distress as a result of COVID-19. The financial measures described below are in addition to certain other emergency measures which have been implemented in the Netherlands, including job retention measures and tax breaks.

Dutch corporate guarantee scheme

The Dutch corporate guarantee scheme (the “CGS”) was implemented by the Dutch government to help distressed Dutch midsized and large companies during the credit crisis in 2009. Under the CGS, Dutch companies were able to obtain more favourable financing from banks (including guarantee facilities) for which the government granted a 50% guarantee on new loans of up to EUR50,000,000.

In light of COVID-19, the government announced an increase to the CGS budget from EUR400,000,000 to EUR1,500,000,000 and an increase of the 50% state guarantee to new loans of up to EUR150,000,000. Among other conditions, borrowers must have substantial business activities in the Netherlands and banks must on-pay to the government part of the interest margin charged to the borrower. A number of industries are excluded from the CGS (e.g. agriculture, fisheries and aquaculture (with the exception of supplies and services), real estate for speculative purposes, banking, insurance or investment or private equity and health care (with certain exceptions)).

Guarantee scheme for midsized companies

A temporary facility has been implemented under the existing government guarantee scheme for midsized companies facing financial distress because of COVID-19. Midsized companies are those that have less than 250 employees and a maximum turnover of EUR50,000,000 per year, or a maximum balance sheet total of EUR43,000,000. Under this guarantee scheme, companies are able to obtain up to 75% (previously 50%) of their required financing, whereby the government will guarantee 90% of the loan (with a maximum guaranteed amount of EUR1,500,000). The scheme can be used for the purpose of bridge financing or to increase working capital facilities with a maximum tenor of 2 years.

Financial support for Qredits

Qredits is a foundation which provides micro financing to starters and micro companies. To mitigate any COVID-19 risks for Qredits, starters and micro companies, the government announced support for Qredits of up to EUR6,000,000. The support means that borrowers who have a loan from Qredits do not have to repay their loan for a period of 6 months and interest rates will be reduced to 2%.

Suretyship scheme for midsized agricultural companies

The suretyship scheme enables midsized agricultural companies to attract financing that would otherwise not be possible. Under the scheme, bridge financing will be available which will be subject to 70% government cover with certain conditions such as size (up to EUR2,800,000), tenor (up to 2 years) and upfront fees (3%, or 1% for start-ups).

Loan payment deferrals

Meanwhile, certain Dutch banks (ABN AMRO, ING, Rabobank, Volksbank and Triodos Bank) have announced an automatic postponement of repayment obligations of midsized companies for loans of up to €2,500,000 for a period of 6 months.

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Pim van Leersum, Partner

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On 13 March 2020 the Norwegian government proposed several mitigating measures against the negative effects of the measures taken against the spread of the Covid-19 virus in Norway. The number of proposed measures have increased over the last two weeks.

The main measures are:

        1)         the introduction of a NOK 50 billion SME liquidity credit facility to be guaranteed 90% by the State and to be administered by the banks;

        2)         the re-establishment of the Norwegian State Bond Fund (Nw: Statens Obligasjonsfond), with a NOK 50 billion mandate to invest in the Norwegian bond market;

        3)         reduction in the countercyclical capital buffer for financial institutions from 2.5% to 1%;

        4)         reduction in the period which the employer has to pay salaries following temporary lay-offs from 15 days to 2 days;

        5)         deferred payment of national wealth tax for businesses with deficits;

        6)         deferred deadline for the advance payment of tax for Q1 2020;

        7)         reduction in VAT rates for service and travel and deferred payment deadlines for VAT and employers' national insurance contributions; and

        8)         option to apply up to NOK 30 million of deficit for 2020 against any taxable surplus in 2019, i.e. that paid-in taxes for 2019 will be reimbursed for 2020.

State guarantee relating to banking credit facilities

On 15 March 2020, the Norwegian government launched its crisis mitigation package directed towards Norwegian businesses. One of the measures was a NOK 50 billion state guarantee credit facility aimed towards SMEs. The proposal was adopted by the Norwegian parliament on 21 and 24 March 2020, and is currently awaiting approval by the ESA due to state aid constraints.

Main terms:

         a)         to be administered solely by banks with license to operate in Norway and with automatic issue (reporting duty only) of state guarantees covering 90% of any loss;

        b)         only applies to SMEs (less than 250 employees, turnover of no more than EUR 50 million or balance sheet of no more than EUR 43 million), however excluding real estate owning companies;

         c)         applicants must have business operations in Norway (i.e. registered with the Norwegian Register of Business Enterprises);

        d)         the business must have a severe lack of liquidity due to Covid-19, and (in the banks' opinion) viable post-Covid-19, i.e. that the business would be profitable under normal market conditions;

        e)         maximum amount of NOK 50 million per business, calculated on the basis of 2 times the wage cost in 2019 or 25% of the turnover in 2019;

          f)         term of less than 3 years, preferably shorter with extension options;

        g)         same commercial terms as under normal circumstances with respect to margin, security, guarantees etc.;

        h)         not to be used to prepay existing debt or payment of instalments or interest under existing facilities;

          i)         restriction on dividends as long as the loan is outstanding; and

          j)         50 bps guarantee premium to the State.

Re-establishment of the Norwegian State Bond Fund (Nw: Statens Obligasjonsfond)

The Norwegian State Bond Fund (Nw: Statens Obligasjonsfond) was originally established in 2009 to mitigate the effects of the credit crunch, and was wound up in 2014 when its investments had been repaid. On 15 March 2020, the government proposed to re-establish the fund with an investment mandate of up to NOK 50 billion targeting mid-size and larger businesses.

Main terms:

         a)         details of the specific mandate is yet to be determined;

        b)         the fund will be administered by the National Insurance Scheme Fund (Nw: Folketrygdfondet);

         c)         only bonds issued by Norwegian issuers;

        d)         a substantial part of its investments will be in bonds issued by non-financial businesses, primarily investment grade, but also high yield;

        e)         investments can be made towards the issue of new bonds or by purchase of existing bonds; and

          f)         requirements as to the credit rating of the issuer.

Contact us

Hans-Christian Donjem, Partner, MNA
+47 95 05 48 68
Advokatfirmaet Haavind AS

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With the aim of facing and reducing the economic and social consequences arising from the COVID-19 virus, the Spanish Government issued the Royal Decree-Law 8/2020, of 17 March 2020, on extraordinary urgent measures to face the economic and social impact of the health crisis (the “Royal Decree-Law”). Whilst the Royal Decree-Law has a direct impact on many sectors, this note focuses on those relating to the financial sector.

It should be noted that many of the measures are still very generic (for example, with regard to the criteria applicable to financial transactions which will be guaranteed by the State) and that some are not particularly clear.

It will accordingly be important to see how the Royal Decree-Law is developed by the Government and the various ministries concerned. We will report subsequently at the relevant time on such developments and how the provisions are implemented.

Financing measures to ensure corporate liquidity and avoid insolvency

With regard to financial transactions, the government has approved a series of measures to provide guarantees for existing financing arrangements and to provide new financing through the Instituto de Crédito Oficial (the “Official Credit Institute” or “ICO”), including additional insurance coverage for exports.

In particular, the Ministry of Economic Affairs and Digital Transformation will provide guarantees of up to EUR 100 billion for financing granted by financial institutions to companies and the self-employed to meet their liquidity needs. The details as to how this will be implemented will be established by agreement of the Council of Ministers.

As regards new financing, the Spanish Government is extending the ICO's net debt limit for the granting of new ICO financing lines through the intermediation of financial institutions in the short, medium and long term for larger companies, the details of which are to be approved by the ICO.

On an extraordinary basis and until 18 September 2020, the Spanish Government, through CESCE, S.M.E., the Spanish export credit agency, will provide additional guarantee lines totalling EUR 2,000 million for the new financing of working capital required by unlisted export companies that are internationalised or in the process of internationalisation. However, this will only apply to those companies whose financing needs have not arisen from situations prior to the current crisis, nor from bankruptcy or pre-bankruptcy situations or from incidents of non-payment to public sector companies or debts to the Spanish Government recorded before 31 December 2019.

Furthermore, the Royal Decree-Law clarifies that deeds to formalise contractual amendments to loans and mortgage loans which arise as a result of the above measures will be exempt from stamp duty (AJD).

With regard to mortgage loans, the Royal Decree-Law provides for a moratorium on mortgage payments which will apply to particularly vulnerable mortgagors who see their income reduced.  Such measures include a prohibition on lenders seeking early repayment of the loan and on taking enforcement procedures against qualifying mortgagors for the duration of the moratorium.

Finally, the Royal Decree-Lay modifies the Fund for Technical Provisions associated with the Red Cervera I+D+I (i.e. Investment plus Development plus Innovation) to allow the financing of business research and development projects of SMEs (i.e. Small and Medium Sized Businesses) and mid-cap companies by means of financial support which will be provided through loans managed by the Centre for the Development of Industrial Technology (Centro para el Desarrollo Tecnológico Industrial (CDTI)).

Foreign direct investments in Spain

The Royal Decree-Law provides for certain restrictions relating to foreign direct investments (these being understood to be investments emanating from entities/persons in countries that do not form part of the EU or the European Free Trade Association) through which (i) a holding of more than 10% of the capital is reached in the Spanish target company or (ii) a position is obtained in the Spanish company's management or governing body. The restrictions imply that any such transactions will require prior administrative authorization from the Spanish Government failing which the transaction will be deemed invalid and be classed as a serious infringement for sanctioning purposes.

Those transactions which are subject to the restrictions are the following: certain sectors of investment such as those relating to critical infrastructure, technology, dual-use items, suppliers of critical products (utilities (in particular energy) and food), sectors with access to sensitive information, in particular personal data, and/or media.  It should be noted that the reference to sectors where there is access to sensitive information and in particular personal data is potentially very wide and some further clarification regarding what this is intended to capture would be desirable.

The restrictions also apply to certain investors where the investor is controlled by the government of another country, the investor has made investments in sectors or activities affecting security, public order and/or public health in another member state, or an administrative or judicial proceeding has been initiated against the investor in another state.

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Juan E. Díaz, Managing Partner


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To mitigate the effects of the COVID-19 outbreak and to reduce the spread of the virus, several economic measures have been taken by the Swedish Government, targeted at both small and medium sized businesses and larger companies. Some of the measures presented in response to the COVID-19 virus are outlined below.

Credit guarantees to airlines as a result of the COVID-19 virus

The spread of the COVID-19 virus has resulted in a dramatic fall in the demand for air travel. Airlines are in an emergency economic situation and have difficulties securing loans. As a response, the Government shall, during 2020, have the right to issue credit guarantees of up to SEK 5 billion for loans to airlines that on 1 January this year had a Swedish permit to operate commercial aviation and who have their main operations or headquarters in Sweden. SEK 1.5 billion of the total amount is intended for Scandinavian Airlines (SAS). The state will guarantee the loans extended by commercial banks to eligible airlines. The credit guarantees must be registered and approved by the European Commission (Sw. Europeiska kommissionen) before they can be issued. This bill was passed in the parliament (Riksdag) on 19 March 2020. 

Increased loan facilities and credit guarantees for Swedish businesses

During the past few weeks, the following measures have been presented in order to help Swedish businesses, small- and medium sized businesses in particular, to access finance:

  • The state-owned venture capital company Almi Företagspartner AB (“Almi”) will receive a capital contribution of SEK 3 billion to increase its lending to small and medium sized businesses throughout the country. This reinforcement of the funding of Almi will increase its preparedness to meet the needs of businesses whose activities have been adversely affected by the COVID-19 virus outbreak. This was decided by the Government and did not require approval from the Riksdag.
  • The Swedish Export Credit Corporation’s (Sw. Svensk Exportkredit) credit framework will be increased from SEK 125 billion to SEK 200 billion and can be used to provide both state-supported and commercial credit to Swedish export companies. These measures, along with the cancelled dividend payouts proposed by the Swedish Export Credit Corporation on 19 March 2020, give the Swedish Export Credit Corporation enhanced opportunities to meet the export industry’s increased demand for credit. This was decided by the Government and did not require approval from the Riksdag.
  • The Swedish Export Credit Agency (Sw. Exportkreditnämnden) promotes Swedish exports and the competitiveness of Swedish industry by providing guarantees that facilitate the financing of purchases of Swedish goods and services. Increased credit guarantees totalling SEK 500 billion and lower risk for banks will provide new and improved credit opportunities for companies. A new guarantee for faster and more secure payment to Swedish export companies will also be introduced. This will apply to small- and medium-sized export companies, major export companies and their suppliers. This was decided by the Government and did not require approval from the Riksdag.
  • The Swedish National Bank (the “Riksbank”) has announced that it will be lending up to SEK 500 billion to the banks to safeguard the supply of credit to Swedish companies and that it intends to buy securities for up to an additional SEK 300 billion during 2020. This was decided by the Riksbank and did not require approval from the Government or the Riksdag.
  • A central Government loan guarantee of SEK 100 billion has been proposed to make it easier for companies to access financing. The proposal means that the central Government will guarantee 70 per cent of new loans provided by banks to companies that are experiencing financial difficulty due to the COVID-19 virus but that are otherwise robust. The guarantee will be issued to banks, which in turn will provide guaranteed loans to companies. The loan guarantee primarily targets small and medium sized enterprises. However, there is no formal limit on company size to take part in the programme. The Swedish National Debt Office (Sw. Riksgälden) will administer the guarantee and it is proposed that each company be allowed to loan up to SEK 75 million, although exceptions can be made. The Riksdag will vote on the bill on 1 April 2020.

Temporary reduction of employer’s social security contributions

A temporary reduction of employers’ social security contributions will be proposed for the period 1 March to 30 June 2020. The proposal imply that employers only need to pay the old age pension contribution and that the reduction shall apply to up to 30 employees and on the portion of the employee’s wage that does not exceed SEK 25,000 per month. This entails a tax relief of up to SEK 5,300 per employee and month. To provide equivalent relief to sole traders (Sw. enskild näringsidkare), a reduction of individual contributions is also proposed. The Riksdag will vote on the bill on 3 April 2020.

Temporary change to rules for tax allocation reserves

The rules for tax allocation reserves will be temporarily changed so that sole traders and natural persons who are partners in Swedish partnerships severely affected by the COVID-19 outbreak will receive tax cuts. The new rules mean that 100 per cent of the taxable profits for 2019, up to SEK 1 million, can be set aside in the tax allocation reserve, which can then be set off against possible future losses. The Riksdag will vote on the bill on 3 April 2020.

Liquidity reinforcement via tax accounts proposed

Companies will be allowed to defer payment of employers’ social security contributions, preliminary tax on salaries and value added tax that are reported monthly or quarterly. The payment respite covers tax payments for three months and is to be granted for up to 12 months. The Riksdag passed the bill on 26 March 2020.

Short-term layoffs

The proposal on short-term layoffs is based on a previous proposal on a new system of government support in the event of short-time work, but the degree of subsidy has been significantly increased. This proposal means that employers’ wage costs can be halved, while employees receive more than 90 per cent of their wage. The aim is for affected companies to be able to retain their staff and rapidly gear up again when the situation improves. The Riksdag will vote on the bill on 2 April 2020.

Temporary decrease in rental costs in vulnerable sectors

In its additional amending budget, the Government is allocating support of SEK 5 billion to reduce fixed rents for vulnerable sectors such as durable consumer goods, hotels, restaurants and certain other activities. Under this initiative, landlords who reduce fixed rents for tenants in these vulnerable sectors during the period of 1 April to 30 June will be able to apply for support to compensate part of the rental reduction. The compensation provided will be at most 50 per cent of the reduction in fixed rent, but at most 25 per cent of the original fixed rent. As this initiative involves state aid, it must be approved by the EU before being passed through the Riksdag.

Contact us

Philip Heilbrunn, Partner 


Across the budget on 11 March 2020 and the subsequent COVID-19 briefing meetings the Chancellor of the Exchequer has announced a number of measures to ease the impact that COVID-19 and the accompanying social distancing measures is having and will continue to have on UK businesses.  A range of measures have been announced targeted at both small and medium sized businesses and larger companies.

The key measures are:

1)    the introduction of a new Covid Corporate Financing Facility designed to provide a quick and cost effective way to raise working capital for larger firms who are facing cashflow and working capital issues due to the COVID-19 outbreak;

2)    an extension of the new Business Interruption Loan Scheme to provide loans of up to £5,000,000 to small and medium sized businesses;

3)    a business rates holiday for nurseries and all businesses in the retail, hospitality and leisure sectors, so that no business rates will be payable for the 2020/2021 tax year;

4)    provision of grants of £10,000 to businesses eligible for small business rate relief or rural rate relief;

5)    businesses with a rateable value of between £15,000 and £51,000 will get a cash grant of £25,000;

6)    businesses and employers with fewer than 250 employees as of 28 February 2020 will be able to claim a refund of up to 14 days statutory sick pay and expenditure, for any eligible employee off work due to COVID-19;

7)    a deferral of all VAT payments for the period between 20 March 2020 and 30 June 2020 until January 2021;

8)    HM Treasury will pay 80% of salaries up to £2,500 for up to 3 months of persons who were employed and cannot work due to the COVID-19 outbreak (backdated to 1 March 2020);

9)    HM Treasury will pay self-employed people who earn up to £50,000 a year and who have a  tax return for 2019, a taxable grant worth 80% of their average monthly profits over the last 3 years up to £2,5000, if they have been adversely affected by COVID-19; and

10) all businesses and self-employed people in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs though HMRC’s Time to Pay service.

There areAs a result of concerns that, whilst these are wide-ranging measures, that there are gaps, in particular for those businesses that do not have a rateable value and mid-tier companies (the CBI estimate between 4-5,000 businesses fall within the gap between the Covid Corporate Financing Facility and the Coronavirus Business Interruption Loan) and further measures are expected to be announcedwere announced on 3 April 2020, including improved accessibility to the Business Interruption Loan Scheme and the introduction of the Coronavirus Large Business Interruption Loan Scheme..

Further details on the Covid Corporate Financing Facility and , Coronavirus Business Interruption Loan Scheme and Coronavirus Large Business Interruption Loan Scheme are set out below. We expect that these schemes will be subject to very high demand and are looking at ways to help streamline the process by the sharing of information and best practice.

Covid Corporate Financing Facility (“CCFF”)

The CCFF is a new UK governmental lending facility that has been made available to larger businesses
who meet the eligibility criteria from 23 March 2020.  The Covid Corporate Financing Facility (the “CCFF”):

  •  is operated by the Bank of England (“BoE”);
  • will purchase commercial paper with a maturity of up to one year (“CP”) from eligible companies; and
  • will operate for at least 12 months and for as long as deemed necessary by the BoE.

CP is a commonly used type of unsecured, short-term debt instrument issued by corporations, typically used for meeting short-term liabilities. CP is usually issued at a discount from face value and reflects prevailing market interest rates – this means the return to the investor is equal to the difference between the issue price and the face value of the CP. The BoE has confirmed that this approach will also apply to CP eligible for purchased by the CCFF, with the CP being discounted using a rate based on the maturity-matched overnight index swap (OIS) rate, as determined by the BoE on the day of purchase.


HM Treasury, alongside the BoE, have confirmed that the CCFF will be available to companies which are “fundamentally strong” and make a “material contribution to the economy”. UK incorporated companies (including those with overseas holding companies) with a genuine business in the UK, will normally meet this requirement, but the following will be taken into account, if the company:

1)      is a significant employer in the UK;

2)      has their headquarters in the UK;

3)      generates significant revenues in the UK; and/or

4)      has a significant customer base in the UK.

Companies do not need to have issued CP previously but are required to demonstrate they were in sound financial health prior to the shock, allowing the BoE to look through temporary impacts on balance sheets and cash flows from the shock itself.

Non-bank financial companies are in principle eligible to issue CP for purchase by the CCFF provided they make a material contribution to the UK economy as noted above.  CP issued by banks, building societies, insurance companies and other financial sector entities regulated by the BoE or the Financial Conduct Authority (“FCA”) will not be eligible for purchase by the CCFF. Leveraged investment vehicles or companies which are predominantly active in a business subject to financial sector regulation, will also not be eligible.

We note that companies will need to consider what authorisations they require to issue the CP.  Also, certain corporate reorganisation may be required to comply with the detailed criteria requirements.

Terms of the CP

The CCFF will purchase sterling-denominated CP from eligible companies if the CP:

1)    has a maturity of between one week to 12 months;

2)    where available, has a an investment grade (“IG”) rating (minimum short-term credit rating of A3/P3/F-3/R3 or above, or a long-term rating above BBB-/Baa3/BBB-), from at least one of Standard & Poor’s, Moody’s, Fitch or DBRS Morningstar as at 1 March 2020[8];

3)    is issued directly into Euroclear and/or Clearstream;

4)    does not contain any non-standard features, e.g. extendibility or subordination; and

5)    if issued by a finance subsidiary, is guaranteed by the parent company in a form acceptable to the CCFF.

Eligible companies will be required to sign a confidentiality agreement with the CCFF. The form of this is accessible here.

Eligibility criteria for those companies without a credit rating is as yet untested, but the BoE has confirmed that, where a prospective issuer does not have the required IG rating from Moody's, S&P, Fitch or DBRS because it is unrated (rather than sub-IG), then the BoE will consider accepting, in satisfaction of the relevant eligibility criterion, confirmations from that prospective issuer's leading credit counterparties that, as at 1 March 2020, they internally considered and treated the issuer to be IG. Moreover, the BoE has reserved the right to accept other evidence that a company was in “sound financial health” which suggests that there is at least scope for issuers in possession of private IG ratings from other ratings agencies to approach the BoE for an assessment of eligibility.

How to access the CCFF

The BoE notes that companies wishing to access the CCFF are required to do so via a bank (acting as dealer) and that such companies should, therefore, liaise with their investment bank, who will be able assist with their issuance of the CP. Not all banks have desks that deal with CP issuance. UK Finance provide a list of banks that are able to do so here.

To discuss eligibility, potential issuers may contact The documents required to make an application are listed here.

In order to issue CP, a company will need (unless it has an existing CP programme) to set up a CP programme, which is done by entering into a series of legal documents based on the standard form ECP documents published by ICMA. Such CP programmes do not have to be set up for the exclusive purpose of accessing CCFF funding, so companies would be free to use them in the future for other short term debt fund-raising.

Where the issuing company is not the primary entity in the Group, the BoE has published the form of guarantee which will be required here. There is also a standard legal opinion required in such circumstances from legal counsel to the issuing company.

An eligible company that wishes to sell CP to the CCFF should submit their offer to the BoE’s Sterling dealing desk between 10-11.00 am (London time) each day.  Purchases by the CCFF will be subject to a minimum purchase amount per individual issue of CP from each issuer of £1,000,000 (nominal amount).  The CCFF’s purchase of commercial paper will normally settle two days after the trade date.

The CCFF will purchase securities at a spread above a reference rate, based on the current sterling overnight index swap (OIS) curve and pricing will be kept under review in light of market conditions. The intention is that pricing of the CP will be on terms comparable to those in the market prior to the COVID-19 outbreak, but it is not yet clear how the market rate will vary depending on the term of the CP. 

Purchases of CP in the primary markets may be limited by issuer. Any such limits applying to individual issuers will be made available, on request, to the issuer only and where two or more issuers are part of the same group, an aggregate limit may be applied within which any limits applying to the individual issuers are wholly or partly fungible.

The names of issuers and securities purchased or eligible will not be disclosed publicly.

The full briefing note jointly published by the BoE and HM Treasury can be accessed here and further information can be accessed here.

Coronavirus Business Interruption Loan Scheme (“CBILS”)

A temporary loan scheme delivered by the British Business Bank launched the week commencing 23 March 2020 to support small and medium sized businesses, who would otherwise not have the required security to access bank lending and overdrafts.  To be eligible for the CBILS, the business must:

1)    be a UK based small or medium enterprise with a turnover of £45,000,000 or less per annum[9];

2)    operate within an eligible industrial sector (a list of ineligible business sectors are set out below);

3)    have not received state aid of more than €200,000 over the previous 2 financial years[10]; and

4)    be applying for the funding for business purposes;

5)    have a borrowing proposal which, were it not for the Covid-19 pandemic, would be considered viable and for which the provision of finance will enable trading out of any short-to-medium term difficulty;

6)    generate more than 50% of its turnover from trading activity; and

7)    use the CBILS-backed facility to primarily support trading in the UK.

Businesses from all sectors can apply except:

1)    banks and building societies;

2)    insurers and reinsurers (but not insurance brokers);

3)    public sectors organisations;

4)    employer, professional, religious or political organisations; and

5)    trade unions.

Some Banks/Lenders have additional, specific criteria (or limitations) which are set out below:

Bank / Lender

Additional Criteria


ABN-AMRO Commercial Finance

Not listed on website.


Arkle Finance

Non-specific (adopts BBB criteria)


ART Business Loans

West Midlands only. Limited to £150k. Mirrors other BBB criteria.



Limited to £60k. Adopts other BBB criteria.


Bank of Ireland

Not listed on website.


Bank of Scotland

Specific (lengthy) list of criteria (see website link). Mirrors BBB criteria mostly.



Specifically states group turnover must be less than £45m. Mirrors other BBB criteria.


BCRS Business Loans

West Midlands only. Limited to £150k. Mirrors other BBB criteria


Business Enterprise Fund

Limited to £250k.


Calverton Finance

Non-specific (adopts BBB criteria)


Chamber Acorn Fund Humber

Confirmed that although partnered in the CBILS, they have insufficient capital to participate at this time.


Clydesdale and Yorkshire Banks

Non-specific (adopts BBB criteria)

Here (Clydesdale) and

Here (Yorkshire)

Compass Business Finance

Restricted to the manufacturing sector (printing, packaging, engineering). Limit of £250k. Mirrors other BBB criteria.


Coventry & Warwickshire Reinvestment Trust

Limited to Coventry and Warwickshire businesses.


Danske Bank

Non-specific (adopts BBB criteria)


DSL Business Finance

Not listed on website


Enterprise Answers

Not listed on website


Finance For Enterprise

Not listed on website


First Enterprise

Not listed on website


GC Business Finance

Limited to £100k. Business must be B2B and based in the North West.


Genesis Asset Finance

Limited to £100k


Haydock Finance

Not listed on website


Hitachi Capital Business Finance

Not listed on website



Must be an existing HSBC customer. Group turnover of less than £45m.


Let’s Do Business Group

Limited to Essex, Sussex, Surrey, Suffolk and Kent. Only accessible if Bank declined in first instance. Turnover less than £41m (this might be a typo on the website). Limited to 100k.



Must be an existing Lloyds customer. Must have borrowed less than £1.2m from BBB in the last 3 years. Must have not received state aid in the last 3 years.


Merseyside Special Investment Fund

Not listed on website (limited to North West)


Metro Bank

Group turnover must be less than £45m. Applications of £250k are considered without security. Over £250k security is required.



Non-specific (adopts BBB criteria)



Limited to £150,000.


Robert Owen Community Banking

Not listed on website



Non-specific (adopts BB criteria)


Secure Trust Bank

Not listed on website.


Skipton Business Finance

Will only provide this facility to run alongside an “Invoice Finance” facility.


South West Investment Group

Limited to £100k and to businesses operating in the South West region. Other criteria mirror BBB.



Non-specific (adopts BBB criteria)



Not implemented yet (but incoming in the next few days)



Not listed on website


Ulster Bank

Non-specific (adopts BBB criteria)


Key Features of the CBILS

1)    loans of up to £5,000,000 will be available;

2)    the loan may be up to 6 years in term for loan and asset finance facilities and 3 years for overdrafts and invoice finance facilities;

3)    lenders will not be charging any fees to companies under the scheme, but will pay a fee to the government for provision of the guarantee;

4)    the government will cover the first 12 months of interest payments and any lender-levied fees;

5)    the loan will not be limited to businesses that have been refused a loan on commercial terms but to any small viable business who has been affected by COID-19;

6)    the scheme may be used for unsecured loans of up to £250,000. Lenders are not permitted to request personal guarantees on loans under £250,000.  For any loans over £250,000personal guarantees will be limited to 20% of any amount outstanding on the loan after any other recoveries from business assets.[11]; and

7)    the companies still remain liable for 100% of the debt.

Companies should be aware that as part of the application process for CBILS, directors are likely to be required to complete an assets and liabilities form.  This may cause issues in certain businesses where for example there is an investor director.

The lender must be a partner of the British Business Bank and a list of finance providers can be found here. To access the CBILS, companies should contact the lenders directly.

Coronavirus Large Business Interruption Loan Scheme (“CLBILS”)

This new scheme was announced on 3 April 2020 as a result of concerns that many mid-tier companies and businesses that do not have a rateable value were finding themselves in the gap between the CBILS and CCFF.

The government has not yet released all details in relation to eligibility or features of the CLBILS, but an announcement was made that the scheme would facilitate loans of up to £25m backed with a government guarantee of 80% and that UK firms with an annual turnover between £45m and £500m would be able to apply.

Unlike CBILS, the government will not cover any interest or fee payments that are due to the lender.

Further Guidance


  • Businesses eligible for business rate relief, or a grant will be contacted by their local authority.
  • For access to the time to pay service, HMRC have set up a dedicated helpline at 0800 0159 559.

Contact us 

Simon Waller, Partner Head of the Finance and Restructuring Group

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For the full overview from the US click here >

Contact us 

Sarah Paul, Partner


[1] Are qualified as small-medium enterprises those enterprises having less than 250 employees and meeting one of the following requirements: (a) annual revenues not exceeding EUR 50 million or (b) balance sheet assets not exceeding EUR 43 million.

[2] At the beginning of the COVID-19 emergency, public measures regarded just the so called “red zone”, which only included the cities where the virus was spreading the most. As a mere example, the red zone included the cities of Codogno and Vo’ Euganeo. Although, at the beginning of March the Italian Government extended the “red zone” to the entire Italian territory.

[3] Invitalia is a public agency promoting investments and funding for Italian enterprises. The financings are usually granted after a competition, which is opened only to those eligible in accordance with the relevant competition notice.  

[4]The Central guarantee fund is a public institution aimed at supporting, as guarantor, small-medium enterprises in their funding process.  

[5] If a corporation has different ratings from different agencies, and one of those is below investment grade then the CP will not be eligible.

[6] It remains unclear for group companies whether the £45m turnover threshold applies to the entire group, or if each individual company within the group is assessed separately. This has been queried with the British Business Bank. The British Business Bank has not been able to confirm this position, but have indicated that it is very likely that the threshold for eligibility is assessed on the annual turnover of the group as a whole. British Business Bank have stated that they will provide further clarification on this point going forward.

[7] Lenders are taking differing approaches as to whether they require personal guarantees but the British Business Bank has confirmed that a Lender cannot ask for a personal guarantee which extends to recourse against a person’s main home. 

[8] If a corporation has different ratings from different agencies, and one of those is below investment grade then the CP will not be eligible.

[9] It remains unclear for group companies whether the £45m turnover threshold applies to the entire group, or if each individual company within the group is assessed separately. This has been queried with the British Business Bank. The British Business Bank has not been able to confirm this position, but have indicated that it is very likely that the threshold for eligibility is assessed on the annual turnover of the group as a whole. British Business Bank have stated that they will provide further clarification on this point going forward.

[10] We note that this has now been removed from the website of the Government and the British Business Bank so clarity is required over the applicability of this requirement.

[11]  Lenders are taking differing approaches as to whether they require personal guarantees but the British Business Bank has confirmed that a Lender cannot ask for a personal guarantee which extends to recourse against a person’s main home. 


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