Finance Minister Constantinos Petrides announced on Friday extra clarifications on the government support package for homes and businesses to counter the coronavirus’s impact.
The plan concerns interest rate subsidies for homes and businesses and a lump sum to be paid out to small businesses and self-employed individuals.
Petrides announced the three measures at a press conference at the ministry on Friday, following a cabinet meeting earlier in the week.
The first plan approved is an interest rate subsidy for new housing loans, and the second is an interest rate subsidy on business loans.
The minister also announced as a third measure a lump sum too small businesses, who had their activities wholly or partially suspended during the lockdown, and self-employed individuals.
Commenting on the housing loan plan, Petrides said it concerns new loans for primary residences.
The plan covers loans approved from March 1, 2020, until December 31, 2020, and is available from any licensed crediting institutiοn on the central bank’s list. The list is set to be announced in the coming week, the minister said.
“Mortgage loans are excluded, as other special plans of the government subsidize the interest rate,” he said.
The amount of the loan, whose interest rate will be subsidized, must not exceed €300,000.
Petrides said the duration of the interest rate subsidy would be for four years, and the interest rate will be subsidized up to 1.5 percentage points (150 basis points).
The loan, he added, can be disbursed within two years from the license crediting institution’s date of approval.
Petrides said as of Monday, interested parties would be able to contact their crediting institution, if they are part of the plan, and express interest in taking part in the interest rate subsidy plan.
The business loan plan includes an interest rate subsidy and will be available for loans issued from March 1 until December 31, 2020.
“We believe that this measure will contribute to satisfying the needs in working capital but also for investments within the Republic,” he said.
The duration of the interest rate subsidy will be four years for businesses and available to very small, small, medium-sized, and large companies. It will also be available to self-employed individuals.
The minister added the loan must not exceed €800,000, and it will be available to businesses, who will have loans approved by the European Investment Bank (EIB) by December 31, 2020.
Business loans covered by different government plans will be excluded, Petrides said.
The interest rate subsidy for business will cover 350 basis points to very small, small, and medium-sized enterprises, as well as self-employed individuals for the first and second years.
For the third and fourth years, these businesses will have 200 basis points covered by the interest rate subsidy.
Large businesses will have 150 basis points covered.
Regarding the lump sum to be given to small businesses, who had their activities wholly or partially suspended during the lockdown, and self-employed individuals, Petrides said they decided to support companies operating with up to 50 employees.
Correctly, businesses employing one person will receive €1,250, while companies using two to five people will receive €3,000.
Businesses with six to nine employees will receive €4,000, and companies with ten to 50 employees will receive €6,000.
The cheques will begin to be given out to the businesses starting next week, Petrides said.
He added the businesses do not need to register if they have already taken part in previous government support plans.