COVID 19-related support for businesses
The government has announced another wave of support provided to businesses and the self-employed hit by the coronavirus outbreak. The COVID II programme aims to support operational financing. The COVID 19 Technology programme and the new Czech Rise Up programme currently under preparation are intended for producers of medical supplies and devices. Below we comment on the new developments in this area.
COVID II – guaranteed operating loans
Following the successful COVID Loan programme, the Czech-Moravian Guarantee and Development Bank (ČMZRB) in cooperation with the Czech Ministry of Industry and Trade (MIT) is preparing another programme for the self-employed and small and medium-size companies to boost their operational financing - COVID II. Unlike the COVID Loan programme, this will not involve interest-free loans but guaranteed operating loans rendered by commercial banks with a ČMZRB subsidy for the payment of interest.
Businesses whose economic activities have been restricted due to the coronavirus pandemic and related preventative measures will be provided by ČMZRB with guarantees of up to three years for operating loans from commercial banks, drawn in amounts ranging between CZK 10 thousand and CZK 15 million. In addition to guarantees, ČMZRB will also provide subsidies for the payment of interest. The COVID II programme will have CZK 5 billion for allocation and, thanks to the involvement of commercial banks and their resources, the self-employed and small and medium-size businesses will be able to draw operating loans totalling up to CZK 30 billion from commercial banks. The guarantee provided by ČMZRB should cover up to 80% of the commercial credit amount, while applicants may also utilise financial subsidies of up to CZK 1 million to pay related interest. The loans will have to be used for a specific purpose, i.e. to reimburse operating expenses such as wages, energy, rent, material purchases, etc.
It is expected that applications may be submitted starting on 2 April 2020. The programme’s specific criteria are yet to be disclosed.
Call to participate in the COVID 19 Technology programme
Within the Enterprise and Innovations for Competitiveness Operational Programme, the Ministry of Industry and Trade is preparing a new call within the Technology programme designated as COVID 19 Technology, aimed to provide support for the production of medical supplies and devices and the development and launch of new technologies to fight the coronavirus pandemic. Total funds for allocation should amount to at least CZK 300 million, with a subsidy of up to CZK 20 million per project. According to the information currently available, only small and medium-size businesses will be able to apply for support under this programme.
Specific criteria and more detailed information will be included in a call that is to be announced on 14 April 2020.
Czech Rise Up – Smart Measures against COVID-19
A new programme, Czech Rise Up – Smart Measures against COVID-19, should also be announced. This should also be aimed at large businesses. Support shall be provided for the implementation of new solutions helping to fight COVID-19, including measures to mitigate the effects of any further spreading of the coronavirus. Subsidises will be provided for expenses incurred to purchase materials to produce protective and medical supplies and devices, and the wage expenses of employees involved in such a production. Funds will also be available for technological solutions and entirely new innovative solutions, and the completion of solutions whose development is already in progress. The subsidy per one project may amount to up to CZK 5 million. More detailed information will be published on the announcement of a call to participate, which is expected to occur in the upcoming days.
We are monitoring the developments regarding potential subsidies very closely. We will inform you about any new developments in the next issue of Tax and Legal Update.