Czech Republic & COVID-19 & Financial guarantees and help for businesses

Written By

lubomir brecka module
Ľubomír Brečka

Counsel
Czech Republic

I'm a counsel in our Corporate & Commercial and Banking & Finance Groups based in Prague.

In order to mitigate impacts of state measures adopted in connection with the coronavirus (COVID-19) pandemic, the Government of the Czech Republic in cooperation with the Czech-Moravian Guarantee and Development Bank ("CMGDB") introduced special loan programs aimed at facilitating entrepreneurs' access to operational financing.

Under the COVID I interest-free loan program for entrepreneurs, all funds have already been exhausted. The COVID II program is currently under preparation and should be launched in the next two weeks.

Through the COVID II program, commercial banks will provide loans to entrepreneurs (including self-employed persons and small and medium-sized entrepreneurs) for operational financing, for which the State through the CMGDB will provide guarantees with a financial contribution for interest payments. The CMGDB is planning to allocate CZK 5 billion to the COVID II program (after involvement of commercial banks entrepreneurs should be able to utilize up to CZK 30 billion within the program).

The discussed proposal of the COVID II program is based on the fact that the CMGDB will guarantee loans from CZK 10,000 up to CZK 15 million and the provided guarantee will cover up to 80% of a commercial loan with the possibility to draw up a financial contribution of up to CZK 1 million for interest payments.

In addition to the above program the Government of the Czech Republic has proposed to pay CZK 15,000 per month to self-employed persons affected by the adopted measures for the duration of such measures. Once the relevant legislation will be drafted, it will be referred to the Chamber of Deputies of the Czech Republic for discussion.

Apart from the above stated State supported programs and measures, Czech leading banks (including Česká spořitelna, Československá obchodní banka, Raiffeisenbank and Komerční banka) are offering to their clients to request the deferral of mortgage loan or loan for up to three month.

We are monitoring all developments regarding the details of the COVID II program and other financial measures and we will keep you informed. In case of any questions regarding not only the above mentioned financial measures, we would be happy to help you.

Latest insights

More Insights
mountain scape

European Union Artificial Intelligence Act Guide

Nov 06 2024

Read More
Curiosity line teal background

Riding the Wave - Peak Issues in Australian Law (October 2024)

Oct 18 2024

Read More
glass building

The FCA issues Dear CEO letters to banks, building societies and payments firms setting out its expectations on implementing the APP fraud reimbursement requirements

Oct 17 2024

Read More