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The Government has allocated a fund of €350 million for the MDB to develop the CGS, with the purpose of guaranteeing loans granted by commercial banks in Malta to meet new working capital requirements of businesses facing cashflow disruptions due to the effects of the COVID-19.
The CGS will enable the commercial banks accredited by the MDB to leverage the €350 million fund into €777.8 million in new working capital loans to support all types of businesses in Malta.
Eligible working capital costs under the CGS 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, and maintenance costs.
Businesses of any size and type can apply for loan amounts that can go up to €5 million, depending on the size, wage bill and turnover of the applicant. Under the CGS, businesses can also benefit from improved access to liquidity, at lower interest rates and with a repayment period of up to six years. In addition, the CGS will provide the much-needed breathing space for businesses by providing a six-month moratorium on both the interest payments as well as on capital repayments. The moratorium period can be extended by the commercial banks to one year on a case by case basis.
Loan applications are assessed by the commercial banks in line with their credit policy criteria. Final approval rests with the commercial banks. More details can be found here.