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Malta Development Bank COVID-19 Guarantee Scheme (06/04/2020)

A fund of €350 million has been allocated by the Government with the purpose of guaranteeing loans granted by commercial banks in Malta to meet new working capital requirements of businesses facing cash flow disruption due to the effects of COVID-19.

What is the COVID-19 Guarantee Scheme (CGS)?

The COVID-19 Guarantee Scheme (CGS) will enable the commercial banks accredited by the Malta Development Bank (MDB) to leverage the €350 million fund into €777.8 million in new working capital loans to support all types of businesses in Malta.

What working capital costs are eligible?

Eligible working capital costs include:

  • salaries
  • rental costs
  • energy and water bills and fuel
  • unpaid invoices due to decrease in revenues
  • acquisition of material and stock for continuation of business
  • expenses directly related to contracts which were cancelled or postponed because of the present situation
  • maintenance costs

Is my business eligible?

Businesses of any size and type established and operating in Malta.

  • SMEs – up to 250 employees
  • Large enterprises – exceeding 250

What loan features are applicable to my business?

Loan amounts:

  • SMEs – €2 million (higher amounts up to a maximum of €4 million require MDB approval)
  • Large enterprises – €5 million (higher amounts up to a maximum of €8 million require MDB approval)

Provided that such amounts do not exceed:

  • Double of the annual wage bill of the beneficiary; OR
  • 25% of total turnover of the beneficiary in 2019

Interest rates: Determined by the commercial bank at an interest rate reduction of at least 1% on the average lending rate compared to similar facilities.

Term: Between 18 and 48 months, with the possibility of increasing to 72 months subject to additional terms and conditions.

Moratorium: Minimum period of 6 months on both interest payments and capital repayments, with the possibility of extending to 1 year on a case by case basis.

Where can I apply?

Business undertakings wishing to avail themselves of the facilities covered by the MDB’s CGS should contact any one of the accredited banks listed on the MDB’s website:

https://mdb.org.mt/en/Schemes-and-Projects/Pages/MDB-Working-Capital-Guarantee-Scheme.aspx

How can we help?

Our office is well versed on the above and we urge you to contact us for any assistance you may require on: [email protected]