Knowledge

Credit Lines (2021 Recovery Measures)

March 2021

SUPPORT LINE FOR EXPORTING INDUSTRY AND TOURISM COMPANIES 

This line, in the amount of 1,050,000,000 euros, is intended for employment and maintenance of jobs in the sectors of industry and tourism through the provision of financing for cash needs.

Micro, Small and Medium Enterprises (SMEs), including individual entrepreneurs (“empresários em nome individual” - ENI), as well as Small Mid Cap and Mid Cap, in any of the cases with activity in the mainland territory, that develop activity in the CAE lists and fulfil the other eligibility criteria foreseen in the respective disclosure document, may apply.

The maximum amount of financing per company is EUR 4000 per job confirmed through the last payroll submitted to Social Security before contracting the operation with the bank. This amount may not yet exceed (i) double the beneficiary's annual wage bill (including social charges, the costs of personnel who work on the company's premises, but which formally appear on the subcontractors' payroll) in 2019 or in the last available year. In the case of companies created on or after 1 January 2019, the maximum loan amount cannot exceed the duly documented estimate of the annual wage bill for the first two years of operation; or (ii) 25% of the beneficiary's total turnover in 2019.

Part of the loan may be converted into a non-repayable grant, subject to a limit of 20% of the financing amount, with the conversion percentage determined as follows:

  • Conversion of 20% of the loan into a non-refundable subsidy with the maintenance of all jobs[1], compared to those verified on the last payroll submitted to Social Security with details of all workers before the date of contracting the operation with the bank, during at least 12 months from the date of hiring;
  • In the case of non-maintenance of all jobs, under the terms of the previous point, the maximum percentage of conversion of the loan into a non-repayable grant (20%) will be reduced in the proportion corresponding to the reduction of jobs, with no conversion taking place if the non-maintenance of jobs is higher than 30% compared to those verified in the last payroll submitted to Social Security with details of all workers before the date of contracting the operation with the bank.

ECONOMIC SUPPORT LINE FOR TRAVEL AGENCIES AND TOUR OPERATORS 

The purpose of this line, with an overall budget of 100,000,000 euros, is to provide liquidity support to travel agencies and tour operators so that they can meet their obligation to reimburse the amounts received for trips organized within the meaning of Decree-Law no. 17/2018, of March 8, which were not made or were cancelled due to an event attributable to the outbreak of the COVID-19 pandemic.

Micro, Small and Medium Enterprises (SMEs), as well as Small Mid Cap and Mid Cap, in any of the cases with activity in national territory, that develop economic activity in CAE Category 79 (Activities of travel agencies and tour operators), as main or secondary activity and that meet the other requirements foreseen in the Disclosure Document may apply.

The maximum amount of funding per company is the value equal to the proven amount of reimbursements owed by the beneficiary to final consumers, or to companies holding a National Register of Travel Agents and Tourism (RNAVT), regarding the amounts received for trips organized within the meaning of Decree-Law No. 17/2018, of March 8, which were not made or were cancelled due to a fact attributable to the outbreak of the COVID-19 disease pandemic, provided it does not exceed the limits provided in the Disclosure Document.

The overall term is up to 6 years after contracting the operation with a grace period of up to 24 months.

The Mutual Guarantee is up to 90% of the capital for loans guaranteed to Micro and Small and up to 80% of the capital for loans guaranteed to Medium Enterprises, Small Mid Cap and Mid Cap.

The spread is capped at 1.25% on loans up to 1 year maturity, 1.50% on loans from 1 to 3 years maturity and 1.85% on loans from 3 to 6 years maturity.

The guarantee fee for Micro, Small and Medium Enterprises is 0.25% during the first year of the guarantee, 0.50% during the second and third years of the guarantee, and 1.00% during the fourth, fifth and sixth years of the guarantee; and for Small Mid Cap and Mid Cap companies 0.30% during the first year of the guarantee, 0.80% during the second and third years of the guarantee, and 1.75% during the fourth, fifth and sixth years of the guarantee.

The beneficiary will not be required to provide any type of guarantee or complementary guarantee (personal or equity).

SUPPORT LINE FOR EVENT ASSEMBLING COMPANIES 

This support line, in the amount of 50,000,000 euros, aims to support the employment and maintenance of jobs in the activity of setting up events. It is aimed at micro, small and medium-sized enterprises (SMEs), including individual entrepreneurs (“empresários em nome individual” - ENI), as well as Small Mid Cap and Mid Cap, in any case with activity in mainland Portugal, whose turnover in 2019 has at least 30% from activity in the context of setting up events, whether in terms of infrastructure or audio-visual, and meet the other eligibility criteria set out in the respective disclosure document.

The maximum amount of financing per company is EUR 4000 per job confirmed through the last payroll submitted to Social Security before contracting the operation to the bank and cannot exceed (i) double the beneficiary's annual salary mass (including social charges, the costs of personnel who work on the company's premises, but which formally appear on the payroll of subcontractors) in 2019 or the last available year. In the case of companies created on or after 1 January 2019, the maximum loan amount cannot exceed the duly documented estimate of the annual wage bill for the first two years of operation; or (ii) 25% of the beneficiary's total turnover in 2019.

Part of the loan may be converted into a non-repayable grant, subject to a limit of 20% of the financing amount, with the conversion percentage determined as follows:

  • Conversion of 20% of the loan into a non-refundable subsidy with the maintenance of all jobs[1], compared to those verified on the last payroll submitted to Social Security with details of all workers before the date of contracting the operation with the bank, during at least 12 months from the date of hiring;
  • In the case of non-maintenance of all jobs, under the terms of the previous point, the maximum percentage of conversion of the loan into a non-repayable grant (20%) will be reduced in the proportion corresponding to the reduction of jobs, with no conversion taking place if the non-maintenance of jobs is higher than 30% compared to those verified in the last payroll submitted to Social Security with details of all workers before the date of contracting the operation with the bank.

MICROCREDIT TOURISM

Taking into account the pandemic evolution, the Normative Order no. 1/2021, of 11 January, changed the conditions of the Support Line for Tourism Microenterprises, created through the Normative Order no. 4/2020, of 20 March, as amended, reinforcing the respective budget to 100 million euros, extending the application of the conversion mechanism of 20% of non-refundable funding to all applications and introducing the possibility that companies that are not working due to an administrative decision not to open can access the support line.

The amount corresponding to the value of the support may be converted into non-refundable support provided that, on 30 September 2021, and by comparison with 29 February 2020 in the case of microenterprises, or 30 November 2020 in the case of small enterprises, the beneficiary enterprise has not terminated contracts of employment under the terms of collective dismissal, redundancy or dismissal for maladjustment, nor has it initiated the relevant procedures.

Additionally, Normative Dispatch no. 8/2021, of March 3 came to (i) increase the line's allocation to 120 million euros; (ii) extend the grace periods ending on March 31, 2022 to June 30, 2022; and (iii) increase the value of the performance premium by 250 euros, upon adherence to the "Clean & Safe" seal and attendance of the respective training actions that take place in the year 2021.

EXTENSION

Decree Law 22-C/2021 was published on 22 March 2021, materializing one of the measures announced on 12 March 2021 and providing for a grace period extension of up to 9 months for credit operations contracted between March 27, 2020 and March 23, 2021 that benefit from guarantees granted by mutual guarantee companies or by the Mutual Counter-Guarantee Fund.

The extension is accompanied by an extension of the maturity of the credit operations for the same period, as well as by the extension of all associated elements, including guarantees and counter-guarantees.

Banco Português de Fomento provides detailed information on the implementation of this measure.



[1] “Maintenance of jobs" is understood as the non-termination of employment contracts under the modalities of collective dismissal, dismissal for termination of the job or dismissal for maladjustment, foreseen in articles 359, 367 and 373, respectively, of the Labour Code.

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