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Overview of country responsesArgentinaArgentina announced a EUR 43 million financing line for SMEs from Banco Nacion at soft rates, of which EUR 36 million will be for firms that produce food, medical supplies, personal hygiene and essential goods, for working capital and / or investments. Another financing line of EUR 7.2 million will be used exclusively for teleworking. On 26 and 27 March, the government expanded its credit program for SMEs to cover employee wages and extended the maturity dates of SME debts. On 31 March, the government created a USD 453 million guarantee fund for SMEs. On 20 April, the government launched a USD 12.9 billion support package. In sectors particularly affected by the lockdown such as entertainment, transport, restaurants and hotels, the government will pay part of the salaries and exempt employers from social security contributions. Unemployment insurance protection has been reinforced for workers dismissed without a fair cause during the lockdown. The Productive Recovery Programme (REPRO) will be extended to guarantee employment for those working in companies affected by the health emergency which means that the State will pay part of the wages of the workers concerned. A total of 350 000 million Argentinian pesos will be used to ensure the production and supply of food and basic inputs, boost activity and finance the functioning of the economy. Necessary overtime will have a 95% reduction in the rate of taxation. The salaries of workers hired for the necessities of the crisis period will have a 95% reduction in the tax rate. Furthermore, the following measures have been put in place:
AustraliaAfter consultation of its members, the Australian business organisation COSBOA drafted a communiqué on measures needed in response to the outbreak, calling for cash injections, communication and collaboration.112 The Council of Small Business Australia requested concessional tax measures followed by business investment promotion, including through a removal of the current cap on instant asset depreciation (IAD) for small businesses in the 2021 financial year.113 On 12 March, the Government announced a federal economic stimulus package of AUD 18 billion114 with measures to support investment and cash flow assistance for small business:115 Delivering support for business investment:
Boosting cash flow for employers
On 22 March, the Government announced a second additional package of AUD 66 billion.116 The package includes a tax free cash payment of up to AUD 100 000 and will be available to businesses with turnovers below AUD 50 million and also to eligible not-for-profit charities.117 Through a new Coronavirus SME Guarantee Scheme118, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The total lending capacity of the facility will be AUD 40 billion (2% of GDP). Under a plan put forward by the banking industry, businesses with up to AUD 10 million in total loan facilities will be able to defer their loan repayments for six months. On 24 March, the government announced temporary changes to the bankruptcy law:119
On 30 March, the government launched its third package, which includes a new wage subsidy plan: a AUD 1 500 per fortnight ‘job keeper payment’ before tax for each employee companies keep on over the next six month, also available for self-employed.120 On 8 June, the government announced the extension of the business support measures.121 On 3 July, media reported on plans of the government for a further AUD 10 billion support plan for companies aimed at recovery.122 On 6 July, measures became effective to reduce the power bill for small companies. Small businesses can receive up to AUD 20,000 to upgrade equipment to reduce energy consumption, invest in monitoring systems to better manage energy use and conduct energy audits to investigate other opportunities for efficiency.123 The Australian government set-up a dedicated website with information for businesses on available support measures, and set-up a hotline for SMEs.124 Also, a small business COVID-19 planning tool has been developed.125 Media report that further measures in Australia are expected.126 States in Australia have taken measures to support SMEs as well.
Furthermore, Australian banks announced support for SMEs through a six month break in loan repayments.132 Internet providers announced AUD 150 million support to households and small businesses in free internet access.133 AustriaAustria is introducing support measures for sectors heavily affected by the outbreak, such as tourism and air transportation, and uses existing measures to reduce hours worked (Kurzarbeit). EUR 100 million are available for loans to hotels that suffer more that 15% losses in sales.134 The maximum is 80% of the loan or EUR 500 000. The Austria Wirtschaftservice (AWS) is providing new bridge finance guarantees for SMEs worth EUR 10 million up to 80% of the loan amount or EUR 2.5 million for 5 years.135 The guarantees will have a one-time processing fee starting with 0.25 % of the amount to be financed and a guarantee fee, starting with 0.3 % p.a. (variable to risk) of outstanding liability.136 As of 12 March, the bridge finance guarantees were expanded by:
On 15 March, a COVID-19 crisis management ("Krisenbewältigungsfonds") fund was announced, with EUR 4 billion in funding.137 On 18 March, a further EUR 38 billion support fund was announced.138 The measures include EUR 9 billion in guarantees and warranties, EUR 15 billion in emergency aid, and EUR 10 billion in tax deferral. The following measures are of particular relevance to SMEs:139
Part of the Krisenbewältigungsfonds is a EUR 400 million support measure to subsidise working hour reductions (Kurzarbeit), accessible within 48 hours and in all sectors. The guarantees include facilities for family businesses, self-employed persons and one-person-enterprises ("Härtefonds für Familienbetriebe und EPUs"), which amounts to EUR 100 million, to help bridge liquidity shortages. On 3 April, the government announced a payment moratorium on loans to consumers and small business.140 The government also announced a further loan guarantee under which the state will guarantee 90% of companies’ loans of up to EUR 120 million or three months’ turnover, under the condition of a one-year ban on dividend payments and a requirement that bonus payments to board members be “strictly limited.” Furthermore, the state is providing grants of up to EUR 90 million to cover part of firms’ fixed costs such as rent, electricity and phone bills, and perishable or seasonal goods whose value has fallen by at least half. On 15 June, the government announced plans for a further EUR 14 billion stimulus package including tax cuts, welfare payments, investment subsidies and fixes of the rescue fund.141 The Ministry of Economy and Digitalisation established a taskforce to monitor the impact of the outbreak on all firms.142 All nine Austrian regions (Bundesländer) have set up aid packages that complement and expand the measures taken by the federal government. In particular, the regions are strengthening hardship funds and measures to secure liquidity and are adapting the programmes to local circumstances:
BelgiumThe Belgian government has taken several measures in response to the crisis.145 An impact analysis focusing on businesses was published.The Belgian government is informing companies on shortening working hours in response to the coronavirus. Existing financial instruments for SMEs – such as the SME growth subsidy – can be used by SMEs, particularly where supply chains are impacted.146 On 6 March, the government announced further measures, including147:
On 20 March, the government announced a further package, which include measures for SMEs and self-employed:148
The government on 20 March has also intensified the measures to allow deferral of tax and social security:
On 22 March, the government, central bank and the financial sector announced further measures to safeguard credits to citizens, self-employed and business. The financial sector will grant a deferral of debt payments until 30 September. Furthermore, the government opens up a EUR 50 billion new guarantee for all new credits up to 12 months.149 Mid-April, Belgium introduced a moratorium on bankruptcies for businesses severely affected by the crisis but which had been in good health up to 18 March. It protects them against foreclosures, and from being declared bankrupt at the request of their debtors, although this can still occur at the request of the Attorney General or of the debtors themselves. Ongoing contracts cannot be terminated for non-payment and, for now, debtors are not obliged to file declarations of bankruptcy. Belgian regional governments have taken measures as well:
Early May, a EUR 250 million package for start-ups, scale-ups and SMEs in Flanders was approved. Under the scheme, viable companies affected by the COVID-19 outbreak are eligible for subordinated loans of up to EUR 800 000 over three years. The credits must fully cover the financing needs for at least 12 months. Companies pay an interest rate of 5%. BrazilOn 16 March, the government announced a USD 30 billion package of emergency measures, including an deferral of company taxes, with further measures with regard to SMEs announced on 17 and 18 March.153 The package includes:154
On 18 March, Brazil’s Central Bank lowered the benchmark interest rate SELIC by 50 bps to a historical minimum of 3.75%. This follows a reduction of the countercyclical capital buffer requirements. On 6 May, the rate was further reduced to 3%.155 On 18 March, Brazilian authorities also announced the possibilities for firms to reduce working hours and pay by up to 50% while maintaining the employment link, but there is no compensation for workers for the resulting income losses. Further flexibility for firms will come from extended use of the bank of hours and the possibility to anticipate annual leave, including collective annual leave. On 20 April, state-owned savings bank Caixa Econômica Federal and the small business association Sebrae announced a new credit line for small business.156 BulgariaThe government put in place the following measures of relevance to SMEs:
On 24 April, a EUR 150 million support scheme for SMEs was approved by the European Commission. The scheme, which will be open to SMEs active in all sectors with certain exceptions, aims at enhancing access to liquidity by those companies, which are most severely affected by the economic impact of the coronavirus outbreak, thus helping them to continue their activities, start investments and maintain employment. The support will not exceed 800 000 euro per company.157 CanadaOn 5 March, the Bank of Canada lowered the policy rate by 50 basis points.158 On 12 March, the Bank decided to lower rates by a further 50 basis points from 1.25% to 0.75%.159 On 27 March, the rate was further reduced to 0.25%. The Canadian Federation of Independent Businesses (CFIB) has issued business-specific public health advice,160 as have small business organisations at the provincial level.161 As elsewhere, some fiscal stimulus will occur automatically to the extent to which the economic impact of coronavirus lowers tax revenue and increases public health spending. On 11 March, Canada announced a 1 billion CAD COVID-19 Response Fund with an emphasis on health. For business, this includes the following: “To support businesses should the economy experience tightening credit conditions, the Government will act swiftly to stimulate the economy by strengthening investment in federal lending agencies such as the Business Development Bank of Canada (BDC) and Export Development Canada. This partnership between Canada’s financial Crown corporations and private sector financial institutions, in response to credit conditions during the 2008-2009 financial crisis, provided CAD 11 billion of additional credit support to 10 000 firms. In addition, flexible arrangements could be made for businesses trying to meet payment obligations to the Canada Revenue Agency.”162 Moreover, access to the Employment Insurance fund has been improved. This measure provides income support to employees eligible for Employment Insurance benefits who work a temporarily reduced work week while their employer recovers. Business Development Canada (BDC) now offers the following support for entrepreneurs163:
On 18 March, the government announced a further CAD 82 billion support package as part of its COVID-19 Economic Response Plan, including CAD 27 billion in emergency aid for workers and businesses and CAD 55 billion in tax deferrals.164 The measures include:
On 25 March, the government announced further measures for SMEs, including:166
Furthermore, the government has extended the maximum duration of the Work-Sharing program169from 38 weeks to 76 weeks to support businesses affected by COVID-19. The Work-Sharing program provides income support to workers who agree to reduce their normal working hours because of developments beyond the control of their employers. On 17 April, the government announced a further CAD 1.7 billion support package, which includes several support measures for small businesses:170
These measures will be executed in the context of a Regional Relief and Recovery Fund and delivered by regional development organisations, and specifically aim to support small business that so far have not been reached by earlier policy measures.171 On 18 April, the government announced a CAD 306 million support package for indigenous businesses.172 On 24 April, the government announced the Canada Emergency Commercial Rent Assistance ("CERA") program to support small business cover their rent for the months of April, May, and June. Under the CERA program, commercial property owners will be able to access forgivable loans to cover 50% of the applicable rent periods. The loans, which would go directly to the mortgage lender, will be forgiven if the property owner agrees to reduce eligible businesses' rent by at least 75% for the duration of the program. The provinces and territories will contribute up to 25% of the total cost of the CERA program, as well as manage its implementation. A business is eligible for rent relief if it pays less than CAN 50 000 per month in rent, has had to temporarily cease operations, or has experienced at least a 70% reduction in revenue as a result of the COVID-19 pandemic.173 The government also expanded the Canada Emergency Business Account, a government-guaranteed credit program to provide small businesses with CAD 40 000 in loans. Companies with 2019 payroll costs between CAD 20 000 and CAD 1.5 million are now eligible. Previously the range was between CAD 50 000 and CAD 1 million.174 On 16 May, a CAD 15 million COVID 19 support scheme for women entrepreneurship was announced.175 The government and the Canadian Chamber of Commerce work together in the Canadian Business Resilience Network, to assist SMEs in preparing for opening, for instance through a toolkit.176 The six largest financial institutions in Canada have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges, such as pay disruption due to COVID-19, childcare disruption due to school or day care closures, or those suffering from COVID-19. As a first step, this support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products. Digital platforms have also set-up support services for SMEs.177 Logistic service providers also launched SME support178, as have Fintech companies.179 ChileThe Chilean Central Bank announced on 16 March it would lower interest rates from 1.75% to 1%, and further cut rates to 0.5% on 31 March.180 On 19 March, the government announced the Emergency Economic Plan I of USD 11.7 billion package. The package includes:
On 22 March, the Chilean government announced it would provide additional financing needs for a new emergency package of USD 5.5 billion to save jobs and help small businesses.181 On 8 April this Emergency Economic Plan II was launched. The following measures have been put in place:182
On 27 April, the government presented Compra Agil, a program to facilitate the participation of SMEs as government contractors. The program will be applied to all acquisitions for values below CLP 1.5 million (USD 1 773), which represent 80% of all central government acquisitions.183 Furthermore, from April, the State will pay all pending invoices to date by the central government. Additionally, any invoice issued after this process will be paid within a period of up to 30 days. The measure involves a cost of USD 1 000. On 28 April, the government launched a USD 3 billion guarantee fund for small entrepreneurs by Banco Estado. The program will offer guarantees for up to USD 24 billion dollars and will benefit 99.8% of companies in the country.184 On 29 April, the government signed a new bill to protect 1.2 million independent workers, putting in place a new income protection insurance system that will benefit self-employed individuals whose incomes fall by at least 20%. The Financial Market Commission unveiled a package of measures to facilitate the flow of credit to businesses and households, which includes: (i) special treatment in the establishment of provisions for deferred loans; (ii) use of mortgage guarantees to safeguard SME loans; (iii) adjustments in the treatment of assets received as payment and margins in derivative transactions; and (iv) start of a review of the timetable for the implementation of Basel III standards. On 15 June, agreement was reached on a further USD 12 billion stimulus package. The new measures will boost income for poor families and the unemployed, subsidize job creation and cut taxes for SMEs.185 Through the three stimulus packages, the following deferral measures have now been put in place:
The following financial measures have been put in place:
The following measures have been put in place regarding labour:
The government also put in place a number of structural policy measures, which include:
Chilean banks have also introduced support measures for SMEs.191 ChinaSince late January, the Chinese Government has adopted several financial support measures192 aimed at reducing the burden its virus-control policies have placed on companies. Some measures, such as liquidity injections by the central bank and reductions to port and logistics fees, provide generalised economic support. In some cases these benefit SMEs as well, for instance, the reduction of the reserve requirement ratio for banks’ lending to SMEs, agriculture and entrepreneurs as well as for selected joint-stock banks. There has been strong emphasis on more targeted policies to channel funding directly to the companies that need it most, including SMEs193. The February G20 Newsletter on Entrepreneurship, published by The Entrepreneurship Research Centre on G20 Economies, provides a comprehensive overview of such measures: These include short term measures to address liquidity shortages and financing difficulties, as well as longer-term plans for improving SME resilience, such as through technology adoption and digitalisation: 194
For a number of these measures, a timeline could be constructed on how they evolved during the crisis:195
On 31 March, the government announced it will step up support for SMEs by increasing financing quotas of small- and medium-sized banks by USD 140 billion.201 It also announced measures to reduce the tax burden for SMEs through deferrals, preferential tax policies and increasing export tax rebates rates.202 Furthermore, financial institutions will extend loans totalling CNY 300 billion to small and micro firms. Other loan programs are developed, including using SME’s business orders and potential revenue as collateral, to help SMEs raise CNY 800 billion in capital.203 On 13 May, the government announced support measures for the digitalisation of SMEs.204 The National Development and Reform Commission (NDRC) will cooperate with other government departments, leading enterprises, financial institutions, research institutes and industrial associations to provide online services for SMEs to help them digitalise. On 22 May, the government announced further measures to support SMEs, included plans to delay loan repayments and interest payments, as well as increasing bank loans. 205 SMEs will be entitled to delay loan and interest payments by a further nine months, and big commercial banks will be obliged to increase lending to SMEs by more than 4%. The Chinese government also aims to reduce the country’s corporate tax and fee burden by more than CNY 2.5 trillion (USD 350.5 billion) for all businesses over the course of the year. On 1 June, the Central Bank started its USD 140 billion programme to buy bank loans made by local lenders to small firms, to increase lending to small business.206 On 4 June, the government extended the repayment of USD 183 billion of loans to SMEs.207 In addition, a wide range of policy measures have been announced for SMEs at the regional level in China.208 These include deferred tax payments for SMEs, reducing rent, waiving of administrative fees, subsidizing R&D costs for SMEs, social insurance subsidies, subsidies for training and purchasing teleworking services, and lowering lending rates. Furthermore, banks are being granted extra funding to spur SME loans.209 In Hubei province, SMEs can receive a grant to hire new college graduates.210 Northeast China’s Jilin Province launched an online financing system for small businesses.211 Online banks and technology firms are stepping up SME support as well.212 ColombiaOn 11 Mach, the Colombian president announced a package of economic measures to mitigate the effects on the tourism and aviation sectors. In particular, the government postponed the payment of the VAT and income taxes for the tourism and aviation sectors. Furthermore, it decided to reduce the import tariffs for some inputs related to the health and aviation sectors, on a temporary basis. The Government has also opened a new credit line for the tourism and aviation sector. On 27 March, the Central Bank cut the interest rate to 3.75%. On 30 April, the rate was lowered to 3.25%. On 6 April, development bank Findeter launched a COP713 billion credit line to underpin private companies and municipal and state governments affected by COVID-19. Of these, COP461 billion were allocated as 7-year loans with a 2-year grace period for working capital needs. Another COP252 billion were allocated to 12-year loans with a 2-year grace period for investment needs. Beneficiaries were given access to these loans through financial intermediaries whose interest rates were capped at 2% above Findeter’s interest rates.213 Also, the government announced the creation of a new COP12 trillion special guarantees program to mitigate the impact of COVID-19 on the business sector. Through this program, the government will guarantee small business loans serving liquidity requirements to pay for personnel and fixed costs.214 Furthermore, the following measures have been put in place:
On 9 April, the government announced a line of loan guarantees to finance 3 months salaries of MSMEs up to 5 minimum wages, as long as no worker is fired; and special credit line to own accountant workers. On 16 April, the government announced the National Guarantees Fund, or FNG, will provide guarantees for loans held by SMEs and microenterprises to cover working capital and payroll costs.215 On 29 April, Findeter opened a working capital line of credit for utility companies at 0% interest so that they can defer for 36 months payments from low income clients during the pandemic. Utility companies will have three years to pay back, with a three month grace period. On 7 May, the government launched further plans to mitigate the effects of the pandemic. The government will subsidize 40% of minimum salary and 20% of receipts for companies. The subsidy will have a cost of COP 2 trillion (USD 507 million) per month, and a total of COP 6 trillion over a period of three months. Costa RicaThe government introduced the following measures of relevance to SMEs:
CroatiaOn 17 March, the government adopted 63 measures to support the economy.216 The measures include:
From 23 March, the government has made available special subsidies to employers, to cover salaries of full-time and part-time workers in accommodation, food and beverage, transportation and storage and other sectors in which workers are prevented from attending work due to confinement measures. In April, the government increased this support from HRK 3250 per worker to HRK 4000. The total payment for March amounted to HRK 1.55 billion. On 1 April, the government announced an exemption on payment of income tax and contributions for entrepreneurs with an annual income of less than HRK 7.5 million (representing 93% of firms), whose revenue declined by more than 50%. Companies with an annual income above the threshold will be partially exempted. The Croatian Bank for Reconstruction and Development (HBOR) allows for moratoriums and loan extensions on debts towards it, as well as new liquidity loans to assure basic expenses of businesses. The total value of the measures is estimated at around HRK 13.5 billion. Czech RepublicThe government (Ministry of Industry and Trade (MIT) and the Czech-Moravian Guarantee and Development Bank (ČMZRB)) has approved the national program COVID Loan.217 It aims to facilitate access to operational funding for small and medium-sized enterprises, whose economic activities are limited due to the occurrence of coronavirus infection and related preventive measures. The COVID 1 Loan program (CZK 5 billion, EUR 180 million) provides support for SMEs in the form of soft loans from CZK 500 000 up to CZK 15 million with zero interest rate. Loans are granted up to 90% of eligible expenditure with a maturity of 2 years, including the possibility of deferred repayment for up to 12 months. The loan may be used, for example, for the acquisition of small tangible or intangible assets, the acquisition and financing of inventories or for other operating expenses and expenditures. There are no fees associated with the processing and granting of the loan or its possible early repayment. Applications can be submitted to the ČMZRB branches from 1 April 2020. To accommodate high demand for loans under COVID I the government further approved COVID II program with another 5 billion CZK allocation in the form of guarantees for loans (CZK 10 000 to 15 million) from commercial banks (with annual deferral of repayments), where the Czech-Moravian Guarantee and Development Bank will be subsidising the interest rate. This is expected to facilitate distribution of up to CZK 30 billion among the programme participants. Furthermore as of 16 March, taxpayers may postpone certain payments of requests for tax delays, requests for adjustment or reduction of advances, requests for waiver of penalties in case of delay, requests for extension of deadlines for certain tax returns. These include:
On 31 March, the government launched the Antivirus company support programme. Through this programme, the government will pay out (through the respective employers) 60% of the average contribution base to employees affected by the quarantine. At the same time the Government will support employers who continue, despite their businesses being shut down, to pay out 100% of the salary to affected employees by covering 80% of salary costs. In case of a supply chain interruption which is crucial for an employer and such employer still pays at least 80% compensation of standard remuneration to their employees, the state will contribute by 50% of the compensation. In case the employer is hit by significantly lowered demand on his/her services and such employer pays at least 60% compensation of standard remuneration, the State will contribute by 50% of the compensation. On 8 April, the parliament passed a bill that allows for individuals and companies affected by the coronavirus to delay paying their rents, and introduces a ban on evictions of companies/individuals unable to pay rents. Other measures put in place include:218
DenmarkOn 10 March, a first stimulus package was issued, including:219
On 12 March, the government announced a DKK 200 billion package with further measures:221
On 18 March, Denmark announced a further three months package of DKK 40 billion, which includes the following measures for business:223
On 18 April, a further package of measures was announced:
The Danish Export Credit Fund (EKF), a state agency that secures payments of exports of goods and services out for Denmark, will increase its liquidity for in particular SME’s. An increase access to export credit for SMEs by EUR 0.2 billion will assist some 250 SMEs in continuous export business.Furthermore, EKF will establish a new liquidity guarantee worth DKK 1.25 billion in new loans to SMEs with export activities. EKF will cover up to 90% of credit insurance companies' risk on new export activities. A reserve of DKK 5 billion in expected losses is included in the reported budget impact. The government will provide guarantees of DKK 30 billion to insurance companies in 2020, similar to construction implemented in Germany. The government provides an advance in payments of procured goods and services and waives penalties. Local governments will frontload payments to firms and defer charging tax on business properties (EUR 1 billion). The government is developing two loan schemes with subsidised interest rates for start-ups. The first scheme targets companies in their early stages, while the second scheme focuses on companies having already received venture capital. The schemes have a total budget of approximately EUR 296 million billion. The support, in the form of loans, will be managed by the Danish State public investment fund Vækstfonden. On 15 June, the government launched further stimulus and a phase-out of COVID-19 related measures. The elements of most relevance to SMEs are:
Commercial banks in Denmark are easing interest rate repayment for their small business clients.224 EgyptOn 22 March, the government announced a USD 6.4 billion stimulus package. Furthermore, the Central Bank Egypt gave small and medium-sized businesses a six-month extension for credit repayments and cancelled ATM withdrawal fees for the same period. The central bank also increased the daily withdrawal limits for credit and debit cards, and said lenders will “immediately” provide financing for the import of key commodities.225 On 17 March, the central Bank announced a rate cut of 3%-points. The preferential interest rate on loans to SMEs, industry, tourism and housing for low-income and middle-class families, has been reduced from 10% to 8%. Furthermore, the government introduced a number of tax measures of relevance to SMEs:
The Egyptian government has undertaken various efforts to integrate the specific needs of women in its COVID-19 response plan. The National Council for Women (NCW) will be part, along with other state institutions, of the committee in charge of designing additional tailored measures to mitigate the impact of the crisis on informal sector workers. Its recent policy brief outlines the pillars of Egypt's response to women's situation during the outbreak, including immediate and medium-term policy suggestions to mainstream the needs of women in health, social protection and economic measures. It also recently launched a policy tracker to monitor the policy measures taken by the government to respond to women's needs in the context of the COVID-19 outbreak. In May, Egypt’s second-largest private bank, got a loan of USD 100 million from the European Bank for Reconstruction and Development (EBRD), to be lent to businesses most affected by the pandemic, especially SMEs. The EBRD also raised the banks limit under its Trade Facilitation Programme by USD 100 million to USD 250 million. On 12 May, the EIB and the Banque du Caire announced EUR 100 million in finance for SMEs in Egypt.226 Mid-May, the digital platform “Together we Continue” was launched to provide services to SMEs affected by COVID-19 in Egypt and other Middle Eastern countries.227 EstoniaOn 19 March, Estonia has launched a EUR 2 billion support programme, including:
Estonia announced it would share digital education tools developed by its start-ups to other countries.229 Furthermore, community initiatives were launched to support small business.230 European UnionOn 10 March, the European Union announced the establishment of a coronavirus emergency fund of EUR 25 billion, 7.5 billion of which would be available at short notice for healthcare systems, sectors particularly exposed to the outbreak and SMEs.231 Through the adoption of a temporary framework, state aid approval for SME support was eased and speeded-up. On 13 March, the EU announced that this fund would increase to EUR 37 billion.232 On 13 March, a call was launched to startups and SMEs with technologies and innovations able to help in treating, testing, monitoring or other aspects of the Coronavirus outbreak to apply for funding under the EIC Accelerator programme.233 On 29 March, the EC reported in the media that EUR 93 billion had already been made available. On 12 March, the ECB left interest rates unchanged, but announced it will conduct additional longer-term refinancing operations (LTROs), temporarily, to provide immediate liquidity support to the euro area financial system. The LTROs will provide liquidity at favourable terms to bridge the period until the TLTRO III (targeted LTROs) operation in June 2020. Through TLTRO III, “considerably more favourable terms will be applied during the period from June 2020 to June 2021 to all TLTRO III operations outstanding during that same time. These operations will support bank lending to those affected most by the spread of the coronavirus, in particular small and medium-sized enterprises. Throughout this period, the interest rate on these TLTRO III operations will be 25 basis points below the average rate applied in the Eurosystem’s main refinancing operations. For counterparties that maintain their levels of credit provision, the rate applied in these operations will be lower, and, over the period ending in June 2021, can be as low as 25 basis points below the average interest rate on the deposit facility. Moreover, the maximum total amount that counterparties will henceforth be entitled to borrow in TLTRO III operations is raised to 50% of their stock of eligible loans as at 28 February 2019. In this context, the Governing Council will mandate the Eurosystem committees to investigate collateral easing measures to ensure that counterparties continue to be able to make full use of the funding support.”234 On 18 March, the ECB launched a EUR 750 billion Pandemic Emergency Purchase Programme (PEPP), for public and private securities and the expansion of the range of eligible assets under the corporate sector purchase programme (CSPP) to non-financial commercial paper, making all commercial papers of sufficient credit quality eligible for purchase under CSPP.235 On 13 March, the European Bank for Reconstruction and Development (EBRD) announced a 1 billion solidarity emergency financing package.236 On 13 March, the European Commission introduced a Temporary Framework to allow Member States to adopt economic aid measures in the context of the COVID-19 pandemic as an exception to the ordinary State aid rules. In its Communication "Coordinated economic response to the COVID-19 emergency" of 13 March 2020, the Commission set out the different options available to Member States for granting measures that can be activated in the current crisis without involvement of the Commission, including, for example, the suspension of payment of corporate taxes, VAT or social security contributions. In its Communication of 19 March 2020, the Commission identified temporary State aid measures that are compatible with the internal market due to their purpose to remedy a serious disturbance in the economy of a Member State. Such measures can be approved by the Member States after notification by the concerned Member State. Eligible measures include aid to ensure liquidity and access to finance for business activities. The eligible types of aid and aid intensities were clarified by the subsequent Communication of 3 April 2020. According to this document, Member States are now authorised to grant up to EUR 800 000 per company in interest-free loans, loan guarantees covering 100% of the risk or provide equity. The intervention can be cumulated with other measures allowed on an ordinary basis, such as other de minimis aid, thus bringing the aid amount per business to EUR 1 million, and with other measures allowed on an extraordinary basis under the Temporary Framework. The Communication of 3 April 2020 also allowed for further public support measures, such as support for research and development and coronavirus-related production activities, deferral of tax payments and/or suspension of social security contributions, and targeted support in the form of a contribution to the wage costs of companies in most-affected sectors or regions which would otherwise have to lay off staff.237 On 16 June, the temporary state aid framework was extended as well as modified to allow for state aid to be given more easily to start-ups. 238 On 16 March, the European Investment Bank announced it will rapidly mobilise EUR 40 billion in support.239 On 3 April, the Bank reported the development of a EUR 20 billion guarantee fund to support EUR 200 billion in funding for the European economy.240 On 6 April, the European Commission and the European Investment Fund announced they would unlock EUR 8 billion in finance for 100 000 SMEs.241 On 2 April, the European Commission proposed a new instrument of temporary support to mitigate unemployment risks (SURE). SURE support could take the form of loans granted on favourable terms from the EU to Member States, to help them cover the costs directly related to the creation or extension of national short-time work schemes, and other similar measures for the self-employed, in the context of the current crisis. The Commission proposes that EUR 100 billion (0.7% of 2019 EU27 GDP) will be available for this instrument (with no pre-allocated national envelopes), backed by EUR 25 billion of guarantees voluntarily committed by Member States to the EU budget. SURE will have a temporary nature: its duration and scope are limited to tackling the consequences of the coronavirus pandemic. Also on 2 April, the Commission presented the Coronavirus Response Investment Initiative Plus (CRII+), which complements the CRII (already in force since 1 April, and summarised below) by further enhancing flexibility in the use of cohesion funds. This enhanced flexibility is inter alia provided through transfer possibilities across the three cohesion policy funds (the European Regional Development Fund, European Social Fund and Cohesion Fund), transfers between the different categories of regions (e.g. less vs more developed), flexibility regarding thematic concentration, the possibility for a 100% EU co-financing rate for the accounting year 2020-2021, and simplified procedural steps. On 10 April, European Ministers of Finance agreed on a EUR 540 billion virus rescue package, which included next to the SURE proposal and the EUR 200 billion EIB funding credit lines of up to EUR 240 billion from the European Stability Mechanism. On 8 April, the Commission announced some flexibility in competition rules for cooperation between companies in the context of the COVID-19 response.242 On 15 April, the Commission presented a Roadmap with guidance on lifting the COVID-19 containment measures, which include a monitoring role for the SME Envoys.243 On 27 May, the Commission presented its EUR 750 billion recovery plan Next Generation EU. The plan includes a number of elements of direct relevance to SMEs, such as a new Solvency Support Instrument, aiming to mobilise private resources to support viable firms in the sectors, regions and countries most affected (EUR 26 billion of guarantees) and a reinforcement of InvestEU, the main EU investment programme, including a new Strategic Investment Facility to generate investments in boosting the resilience of strategic sectors and key value chains in the internal market (EUR 30.3 billion of guarantees).244 On 4 June, the ECB increased the envelope for its the pandemic emergency purchase programme (PEPP) EUR 600 billion to a total of EUR 1,350 billion, and extended the horizon for its net purchases to at least July 2021.245 FinlandOn 5 March, the Finnish government announced it stood ready to take measures if the impact of the outbreak on the economy worsened.246 The website of the Ministry of Economic Affairs and Employment includes information on how the impact is monitored and measures in place in the context of the State of Emergency declared on 16 March, including a set of mainly health related measures.247 On 20 March, the government announced an additional stimulus package worth EUR 10 billion (4% of GDP). The total stimulus so far amounts to EUR 15 billion (6% of GDP), including:248
The government also announced several labour market reforms, including:
On 8 April, additional spending of EUR 3.6 billion was announced. On 27 April, media announced the government is developing a plan whereby the value-added tax (VAT) paid in the earlier part of 2020 could be reimbursed to businesses.250 The Finish government backs a hackathon to help find innovative solutions to the crisis.251 FranceThe French Ministry of the Economy and Finance on 12 March announced measures for firms encountering serious difficulties due to the coronavirus.252 These include:
On 17 March, the government announced a further package of EUR 45 billion to support businesses:255
The government underlined that no SMEs will lack necessary liquidity.257 Since 12 March, Bpifrance further stepped up its support:
On 23 March, the French banking association announced that French firms facing a cash crunch will be able to get access to low-interest loans (0.25%) to an amount equal to three months of revenue to help tide them over during the coronavirus crisis, with repayments starting after one year.258 On 25 March, France launched a EUR 4 billion emergency plan for start-ups.259 This includes the following measures:
On 31 March, the government announced a further set of measures:260
On 15 April, the government expanded the size of the stimulus package from EUR 100 billion to EUR 110 billion.261 On 9 June, the government launched a EUR 15 billion aerospace support package, which will also benefit SMEs.262 On 25 June, the government extended support measures for business.263 On 14 July, the government announced a further EUR 100 billion in economic support measures, include EUR 30 billion to make the partial employment scheme more long term.264 In addition, national and regional authorities are collaborating to deal with the crisis as part of the new Economic council ‘Etats-Régions’. In practice, regional task forces have been set up together with public development banks to accelerate support measures for enterprises. For instance, Ile de France launched a number of measures for company support.265 Community initiatives, such as the one by La France Tech Toulouse, have been launched to highlight how start-ups can play a role in combatting the crisis.266 Industry associations, such as France Digital, also step up their efforts in supporting SMEs during the crisis, for instance through a toolkit on teleworking and advice to companies. France insurers have also announced up to EUR 1 billion measures to support SMEs.267 GermanyAt the start of the crisis, the government has referred SMEs to instruments already available to help companies cover short-term liquidity requirements, including working capital loans and guarantees.268 Access to short-term work arrangements (Kurzarbeit) was expanded in order to avert a sharp rise in unemployment. In practice, firms can apply for the funds when just 10% of their workers are affected by a work stoppage, compared to one-third previously.269 On 10 March, the federal cabinet extended the short-time work allowance to prevent employee layoffs due to the current slump in orders. Furthermore, the country’s labour ministry plans to relax the Sunday work ban to prevent supply bottlenecks.270 On 9 March, the government announced a package of measures, with federal investments to be increased by EUR 3.1 billion between 2021 and 2024 and including extensive measures to improve liquidity for companies, including SMEs.271 On 13 March, a comprehensive package to guarantee liquidity of affected firms was announced without limits to credits:
The government announced it will do what whatever it takes and evaluate budgetary consequences later.273 On 21 March, the government announced it was working on an emergency budget including support for SMEs, an economy stabilisation fund and further public guarantees through KfW.274 On 25 March, agreement was reached on the size of the package, worth over EUR 750 billion in total. As part of this, on 23 March, the government announced EUR 50 billion in support to small business.275 The measures include grants for small business in all sectors, including the self-employed and liberal professions with up to 10 employees:
A further part of the package is the creation of an economy stabilisation fund (Wirtschaftsstabilisierungsfonds). It aims to ring-fence businesses seen as of critical importance for the German economy as a whole. The fund comprises support of EUR 600 billion, EUR 400 of which for liquidity guarantees, EUR 100 for direct equity participation in businesses of strategic importance for the German economy (incl. critical SMEs) and EUR 100 for re-financing by the KfW. Furthermore, the package includes a new KfW loan guarantee programme for both SMEs and larger firms with no cap on funds.276 The conditions for taking out loans have been improved. KfW will apply lower interest rates and a simplified risk assessment procedure for loans of up to EUR 3 million, which will bring additional relief to the economy. Furthermore, KfW will grant a higher rate of exemption from liability of up to 90 per cent for working capital and investments by small and medium-sized enterprises in order to make it easier for banks and savings banks to grant loans. On 27 March, the “German Covid-19 Insolvency Law Amendment” became effective.277 Through this amendment, the obligation of the management of a legal person to file for bankruptcy has been suspended until 30 September 2020 if certain conditions are met. The new rules shall provide the management with more time and flexibility to decide whether the company can be continued and shall help to avoid insolvencies caused by the circumstances triggered by the Covid-19 pandemic. The new rules do not relieve the management from carefully and constantly observing the situation of the company and updating their assessment as the situation further develops. Making use of the additional rules may also impose personal liability risks on the managing directors. On 31 March, the government announced a start-up fund of EUR 2 billion (Start-up Liquidity Programme 2020), with state support for venture capital for start-ups.278 The measures include:
The Programme focusses on businesses that are characterised by their use of equity, such as start-ups and technology focused companies, and aims to minimize access criteria, apart from some due diligence and assessment. The liquidity support will not be provided to the start-up itself, but to the private investor(s) who aim to invest in those. Applications may be submitted by private venture capital investors or by shareholders such as the founders of a start-up. When applying, such private investors will have to demonstrate in which Start-Ups in their portfolio they want to invest the requested liquidity and the suitability of such choice will be checked. In addition, public Venture Capital investors such as KfW Capital and the European Investment Fund will also benefit from the programme to invest as co-investors jointly with private investors. The provided liquidity is structured as debt, which should ideally return to the German taxpayer with a surplus at some point in time, and not as grant. The government aims for the programme to start in April 2020. In parallel to the implementation of the Start-up Liquidity Programme, the Federal Government is continuing to coordinate the design of the "Future Fund" (Zukunftsfonds) for start-ups which will offer additional liquidity of up to EUR 10 billion and should support the way out of the crisis in the medium term.279 On 3 April, the government announced a EUR 4 000 assistance for SMEs to cover consultancy services to help SMEs find solutions in coping with the crisis.280 On 6 April, the government announced further measures to support SMEs. It intends to increase the risk coverage ratio to 100% held by KfW, up from 80/90%.281 Conditions for this Schnellkredit are:282
On 4 June, the government announced a further support package of EUR 130 billion. The package includes a number of measures of relevance to SMEs:
German Länder are putting measures in place as well. Bavaria has announced a EUR 10 billion fund to buy a stake in struggling companies.283 Many German stores and other service providers (e.g. cinemas and restaurants) are asking clients to buy vouchers for future use in order to stay afloat despite the closure. A platform for this has been set up in Berlin (private initiative), but local authorities are also involved (for instance in Swabia).284 GreeceOn 9 March, the Greek government announced financial relief for companies in areas hit by the coronavirus to safeguard jobs and boost liquidity.285 The measures include:
Furthermore, a new EUR 500 million scheme in collaboration with the European Investment Fund (EIF) could address the financing gap faced by SMEs, which is expected to grow in the context of the coronavirus.286 On 18 March, a refundable advance payment was provided to businesses affected by the crisis and whose loans are performing, on the basis of turnover reduction or other factors. The advance will be a fraction of loss in turnover and can over five years following a one-year grace period and at a low interest rate (EUR 2 billion). On 30 March, the government announced EUR 6.8 billion in further measures focusing on supporting companies that suffer from the outbreak, including tax relief and wage support. The measures include:287
On 3 April, a scheme for the support of the economy through the issuance of guarantees by the Hellenic Development Bank has been approved under the E.U. temporary framework for state aid. The scheme will partially guarantee eligible working capital loans, with the total exposure of the Hellenic Development Bank capped at 40% of the volume of loans issued by a financial intermediary. Solvent SMEs will receive grants of up to EUR 800 000 per company to cover interest on fixed-maturity loans, bonds, or overdrafts. The total size of the scheme will amount to EUR 2 billion. The government also installed a support scheme for self-employed, which was approved by the European Commission mid-May. The scheme will provide a one-off payment of EUR 800 per self-employed person, including self-employed managers of companies that employ less than 20 employees in sectors severely affected by the coronavirus outbreak. The measure aims at partially compensating the eligible beneficiaries for the potential loss of income due to the coronavirus outbreak.288 The government also launched a digital solidarity initiative (www.digitalsolidarity.gov.gr), a platform where large tech corporations provide free online marketing and account management training to SMEs.289 Hong Kong, ChinaOn 25 February, the Financial Secretary announced a reduction of the profits tax by 100% (subject to a cap) and low-interest loans for SMEs, with government guarantees as part of a wider package worth HKD 18.3 billion (USD 2.3 billion).290 A key highlight of the measures was a full government guarantee on loans of up to HKD 2 million for every small and medium-sized enterprise, under a financing guarantee scheme and involving HKD 20 billion in total.291 On 8 April, the government expanded on the measures by introducing a set of new enhanced terms for the 80 percent, 90 percent, and special 100 percent guarantee loans available for SMEs. Under the Enhanced 100 Percent Loan Guarantee Scheme, the guarantee commitment has been increased to HKD 50 billion (USD 6.5 billion). Eligible SMEs will receive a maximum loan amount of HKD 4 million (USD 520,000) and can benefit from the principal moratorium arrangement for the first 12 months. Eligibility for the loan requires that enterprises have been operating for at least three months, as at the end of December 2019, and have suffered at least 30 percent decline in sales turnover – in any month since February 2020. SMEs from all sectors are eligible to apply, particularly those most affected by the coronavirus outbreak – such as retail outlets, travel agencies, restaurants, cinemas, entertainment facilities, and transport operators. The total loan amount guaranteed by the government is HKD 20 billion (USD 2.6 billion).292 Some banks have come forward with liquidity relief (USD 3.9 million) for businesses affected by the outbreak. In September, a bank introduced a scheme under which SMEs could make interest-only payments for six months (one year if the loan is secured by property) since September. This was recently extended to taxi and public light bus operators as a response to the crisis. Moreover, SMEs that have opted for trade finance have the option to convert part of their loan facility into an overdraft facility for six months in order to help with their working capital needs. The bank also announced it would extend the waiving of handling fees until the end of December and would subsidise guarantee fees for SMEs applying to the government’s SME Financing Guarantee Scheme until the same date.293 HungaryOn 16 March, the Central Bank announced emergency steps to shore up the economy, widening the range of collateral it accepts from banks and imposed a moratorium on repayments on loans extended under its Funding for Growth Scheme that provides small businesses with cheap loans.294 On 18 March, the government announced a package of further measures:295
On 23 March, the government announced further measures to support small business. These include: 296
On 6 April, the government announced further measures of relevance to SMEs:
On 8 April, the Central bank announced a HUF 3 000 billion package, HUF 1 500 billion of which available for financing SMEs through the Funding for Growth Scheme Go! It will include 500 billion forints that has not been used under the earlier launched FGS fix programme. FGS Go! will operate with the same conditions as earlier FGS phases: the NBH will continue to provide refinancing loans to banks at 0 percent, and interest to be paid by SMEs will be capped at 2.5 percent. Investments loans, including leases, will still be available, but the maximum maturity of refinancing loans will be set at 20 years in order to secure financing for protracted investment projects with a slower payback period.297 IcelandOn 11 March, the Central Bank lowered the policy rate by 50 basis points to 2.25%, the sixth reduction within 10 months. The parliament is preparing legislation on paid leave during quarantine. On 21 March, the government announced a USD 1.6 billion support package, which includes:298
Community platforms have been set up to support small businesses.299 IndiaThe Reserve Bank of India has gradually reduced interest rates from 5.15% in February to 4% on 22 May. On 19 March, media reported that India is considering offering easier loan repayment terms and tax breaks for small-and medium-sized companies to weather the onslaught of the coronavirus, which would include extending loan tenors and relaxing bad-debt norms for small firms.300 On 20 March, media reported that the State Bank of India will open a special credit facility for SMEs, which aims to address liquidity concerns of SMEs who have seen business disruptions due to the crisis.301 India was reportedly pushing its banks to approve USD 8.1 billion of loans by the end of March. An INR 1.7 trillion (about 0.8% of GDP) package was announced on March 26, mostly focusing on low-income people, farmers and health workers. It includes:
To alleviate liquidity constraints on the firms, the last date for filing income tax returns for FY 2018-19 was extended from March 31 to June 30, 2020. Similar extension applies for the Goods and Services Tax. On 12 May, the government announced a further INR 20 trillion (USD 266 billion) support package, with the specific objective to support the availability of credit to SMEs and microenterprises. This includes measures from the reserve Bank of India as well as fiscal policy. The package includes INR 3 trillion for collateral free loans to MSMEs of four-year tenure with no payments due for one year. It also allocates INR 20 trillion for subordinate debt aimed at helping currently stressed MSMEs, and INR 50 trillion in equity funds for MSMEs.302 The measures include a move to bail out 200 000 ailing small and medium sized companies.303 Furthermore, the package includes the following:
On 14 May, the government announced credit facilities for small, informal businesses and street vendors. These include a 2% interest subsidy on micro loans for a period of 12 months for loans up to INR 50 000 under the existing MUDRA scheme and a special lending programme for street vendors of up to INR 10 000 to finance their working capital, targeting about 5 million street vendors). On 17 May, the government announced a reform of the Insolvency and Bankruptcy Code. The minimum threshold to initiate insolvency procedures is raised by hundred times to INR 10 million; initiation of insolvency proceedings is suspended up to one year; COVID-19 related debt is excluded from the definition of default that would trigger insolvency. Some actions have also been taken at the state level. As an example, the state government of Bihar announced it will bear the entire expenses incurred on the treatment of the coronavirus patients and will pay a compensation for family in the case of death due to coronavirus. Union Territory of Delhi announced (March 20) that pensions for the elderly and widows will be doubled, food will be provided for the homeless, and 7.5 kg free ration will be provided to 7.2 million beneficiaries. Kerala introduced a INR 200 billion package largely focused on people, including: INR 5 billion health package; 2 month welfare pension, INR 20 billion each for loans and employment guarantee programme ; direct handout for subsistence for families not eligible for welfare pensions; free food grains through ration shops for needy families. Through a variety of initiatives, start-ups and SMEs are included in developing innovative solutions to COVID-19 challenges.304 IndonesiaOn 25 February, the government announced a USD 725 million package with financial incentives to support tourism, airlines and property industries, in addition to further subsidies and tax cuts.305 On 13 March, Indonesia announced a further IDR 120 trillion (USD 8.1 billion) stimulus package, representing 0.8% of GDP, including exempting some manufacturing workers from income tax and reducing corporate tax payments for manufacturing companies. As part of the state's non-fiscal response, rules will be relaxed governing restructuring of bank loans to small and medium-sized companies, certification processes for exporters will be simplified and the government will make it easier to import raw materials.306 Since the start of the crisis, Bank Indonesia has cut interest rates on 20 February (to 4.75%), 19 March (to 4.5%) and on 18 June (to 4.25%). The Bank also lowered the rupiah reserve requirement ratio by 50 bps for banks involved in financing small and middle businesses and other priority areas after a 50 bps cut last month to support trade activities. A total of IDR 438 trillion (2.8% of GDP) was made available on 31 March to cushion the socio-economic impact of the crisis. The first two packages includes rebates and relief on personal and corporate income taxes, VAT rate reduction, assistance programmes for vulnerable households, and support to the tourism sector; the third, worth IDR 405 trillion, includes SMEs’ credit restructuring, aid to poor and vulnerable households, and tax incentives and credit for businesses. Provincial governments, notably Central Java, have announced additional interventions. Furthermore, the following measures have been put in place:
Indonesia tries to boost SME exports through virtual business match making events.307 A large Indonesian tech company, announced on 5 May a financial support scheme for SMEs affected by the pandemic.308 IrelandOn 6 March, the Bank of Ireland announced a range of support measures for businesses impacted by the outbreak, including emergency working capital and payment flexibility on loans.309 On 9 March, the Irish government announced an increase in sick pay for workers affected by the virus. These payments will also be available to the self-employed.310 A support package for businesses was also announced, including:
Furthermore:313
On 13 March, Irish Revenue announced the suspension of interest on late payments by SMEs.314 On 24 March, the government announced a new COVID-19 Income Support Scheme, including:315
On 8 April, the government announced a further set of measures:317
The government has also extended its Digital Trading Online Voucher scheme by an additional EUR 3.3 million, by which micro-enterprises can get a EUR 2 500, and have expanded free online training to entrepreneurs.318 In June, support for the vouchers was further extended by EUR 14 million.319 On 2 May, the government announced a further set of measures for business worth EUR 6.5 billion, including:320
On 7 May, Enterprise Ireland announced a specific Sustaining Enterprise Fund to help small enterprises during COVID-19. The fund will provide between EUR 25 000 and EUR 50 000 in a short-term funding injection to eligible smaller companies to support business continuity and strengthen their ability to return to growth. To be eligible for the funding, a company must have suffered, or be projected to suffer, a 15% or more reduction in actual or projected turnover or profit as a result of the COVID-19 outbreak.322 A digital platform announced it would allow Irish SMEs to sell their products online for free during the COVID-19 pandemic.323 IsraelOn 8 March, the Finance Ministry announced it opened a special loan facility for struggling companies to receive support from the State Guarantee Fund for Small Businesses.324 The facility is primarily aimed at SMEs that were experiencing cash flow difficulties as a result of the virus outbreak. It provides working capital loans of up to 5 years to a maximum of NIS 500 000 or up to 8% of the last annual turnover, with possibilities to defer payment for half a year. Banks are expected to provide credit approval within nine working days. On 11 March, the government announced a further NIS 10 billion support package, doubling the amount available under the loan fund. On 16 March, the government announced further measures of importance to SMEs, which include (next to measures to enhance access to loans already announced):325
Furthermore, a number of other policy measures are currently in place:
On 29 March, media reported the government prepares a further package which would bring support towards NIS 80 billion, including a NIS 5 billion fund for small business.326 On 1 April, the government announced a NIS 650 million stimulus plan for the tech sector, via the Israeli Innovation Authority.327 NIS 50 million will be used for innovation for combatting the COVID-19. A package of measures to boost “growth engines” once containment measures are eased, including the acceleration of public investment projects (NIS 1.1 billion), support for SMEs in the high-tech sector (NIS 1.5 billion), and further measures to boost economic activity (NIS 5 billion). On 2 April, the government approved a grant scheme for self-employed.328 Under this scheme, self-employment receive a payment of NIS 6 000 to help them weather the pandemic. Late April, the government approved a plan to provide the self-employed with a second grant of 70% of their regular income up to a maximum of NIS 10 500.329 On 24 April, grants for small businesses (up to NIS 20 million turnover) up to NIS 400 000 to cover fixed expenses were announced. On 24 May, the government has expanded the loan fund for SMEs from NIS 8 billion to NIS 14 billion.330 The government guarantees 85% of each loan but guarantees are limited to 15% of overall losses on all loans. Loans have a maturity of up to 5 years, with lower collateral requirements (5%). The first year is interest rate free. The time required for banks to provide credit approval is reduced to 7 working days. On 16 June, a further package was adopted of NIS 5.5 billion, through which businesses are stimulated to bring back workers that had been paid on unpaid leave. The measure will provide up to NIS 7,500 for each employee who returns to work in the month of June, and NIS 3,500 for each worker who came back in May.331 On 8 July, the government announced a grant scheme for small business where SMEs can get a NIS 1000 grant to acquire a fibre optic internet connection.332 Non-profit initiatives have been set up to support credit to SMEs.333 ItalySince the outbreak of the crisis, the government announced several measures to support the economy. In early March, measures were announced to help sectors such as tourism and the logistics and transport industry, which have been heavily impacted by the virus.334Also support to regions was pledged, totalling EUR 900 million. Backed by the Government, the Italian Banking Association announced an agreement with various business associations to set in place a large-scale moratorium on debt repayments, including mortgages and repayments of small loans and revolving credit lines. It would concern loans subscribed by companies until 31 January 2020.335 On 16 March, the Italian government announced details of a EUR 25 billion (1.4% of GDP) bill. Decree-law no. 18 of 17 March 2020 (“Healing Italy” Decree) consists of an extensive (127 articles) package of measures aimed at strengthening the healthcare system and providing economic support to households, workers and businesses.336 Policy responses addressing employees and self-employed include, among other:
Furthermore, to address liquidity shortages and ease access to finance by SMEs, Cassa Depositi e Prestiti (CDP), National Promotional Institute and Development Finance Institution, have increased the limit for funding to the banking system from EUR 1 billion to EUR 3 billion. The funds are intended to grant subsidised loans to SMEs and mid-caps to sustain cash flow and investments. To support export activity, the Italian export credit agency (SACE) has announced a EUR 4 billion package to help SMEs address cash flow needs and diversify export markets. In addition, the Italian Agency for the promotion of business internationalisation (ICE) has cancelled the costs already incurred by companies for participation in fairs and events, also proposing alternative visibility solutions. On 4 April, the government announced it intends to extend its takeover shield for SMEs.337 On 6 April 2020, the Council of Ministers approved the so-called "Liquidity Decree", disclosing its main components pending publication, bringing the total of support to EUR 400 billion.338 Decree-law no. 23/2020 was published in the Official Gazette on 8 April 2020 and entered into force on the following day, providing for a vast set of measures aimed at supporting access to credit for SMEs:339
Beyond support of liquidity, other measures included in the above Decree include:
On 29 April, media reported that a non-banking financial institution was allowed to provide SME finance under the government guarantee scheme.340 On 13 May, the Council of the Ministers approved a new major package of measures to support businesses, workers and economic sectors (“Recovery decree-law”), of EUR 55 billion. The package includes the following measures of relevance to SMEs:
The Ministry of Innovation and Digitalisations launched an initiative called “Digital Solidarity”. This includes a portal where companies (in particular SMEs and self-employed) can register to access without costs digital services from large private sector companies regarding smart/tele-working, video conferencing, access to mobile data, cloud computing etc., to enable them to cope with restrictions to movement and work. Also, banks have set up programmes to support their SME clients. Several Italian regions have taken measures related to SMEs. 342 JapanOn 13 February, the government announced measures to support financing of local micro, small and medium enterprises and others in tourism and other sectors, by securing a total of JPN 500 billion for emergency lending and loan guarantees at the Japan Finance Corporation and other institutions.343 The government on 29 February announced a further package of measures of JPN 270 billion (USD 2.5 billion), with an emphasis on health measures.344 On 10 March, the government announced a further package of JPN 430 billion (USD 4.1 billion), with several measures directed at SMEs:
Japan also considers extending its programme for property tax breaks for small firms.348 On 21 March, media reported the government planned a corporate tax refund, mainly directed to SMEs.349 On 26 March, the government announced to extend employment adjustment subsidies:350 The subsidy rate for leave allowances will be raised to 80% for SMEs, which can be extended up to 90%, if no employees are fired, and; In addition to raising the subsidy rate, the requirements will be relaxed. On 8 April, the government announced an additional package of economic measures of JPN 86.4 trillion (16.4% of GDP), including additional public spending of JPN 29.2 trillion (5.4% of GDP). It includes the following measures of relevance for SMEs:
On 30 April, a supplementary budget was approved, including a new subsidy program for enterprises struggling to sustain operations, with cash grants of up to JPN 2 million yen for companies with less than JPN 1 billion in capital seeing declines of 50% or more in year-on-year monthly revenue. Sole proprietors, including freelancers, will also be eligible for a maximum of JPN 1 million in subsidies.351 Furthermore, media reported that the government will use a public and private sector fund to financially support larger SMEs hit by the pandemic. The plan is to funnel JPN 1 trillion to qualifying companies via the fund starting by the middle of May, with each getting approximately JPN 100 million. The targets of the funding initiative are companies that cannot presently survive on bank financing alone, but can be expected to recover once the threat of the virus recedes. One main criterion is that they employ at least 50 people and have sales of JPN 1 billion or more annually. Companies that were already in financial difficulties before the crisis hit will not be eligible.352 The Bank of Japan is considering further support to SMEs as well through a new scheme that would reward financial institutions for lending to SMEs.353 On 8 May, media reported that the government intends to launch a rent support scheme for small businesses. Under the proposal submitted to Prime Minister Shinzo Abe, the government will shoulder two-thirds of rent for up to six months if small businesses, irrespective of sector, experience revenue drops. The maximum cap for relief will be set at JPN 500 000 yen a month and JPN 250 000 yen for the self-employed. Smaller businesses that are eligible to receive rent relief need to have logged either a revenue fall of over 50% from a year ago or of over 30% within the past three months.354 On 22 May, the Bank of Japan provided a further JPY 30 trillion in support for SMEs.355 To encourage lenders, the central bank will pay 0.1% interest on the loans made to small and midsize companies while pledging to extend the purchase period of corporate bonds and commercial paper until the end of March from the initial plan through late September.356 On 27 May, decided on a second supplementary budget for FY 2020 of JPY 31.9 trillion (5.8% of GDP), in order to multiply its effort to sustain the economy.357 The proposals include a number of measures of relevance to SMEs, including:
The Bank of Japan, which had earlier indicated it stood ready for further measures358, advanced its Monetary Policy meeting to 16 March, when it decided to strengthen its monetary easing measures. The Bank accelerates the ETF and J-REIT purchases, which has been kept at the annual pace of JPY 6 trillion (1.1% of GDP) and JPY 90 billion (0.2% of GDP), to up to JPY 12 trillion and JPY 180 billion, respectively. In addition, it set an additional purchase limit of JPY 2 trillion (0.4% of GDP) for CP and corporate bonds, with which the Bank increases the asset purchases through September. In addition, the Bank introduced a special operation to provide interest-rate free loans putting up corporate loans as collateral. To help private financial institutions to increase lending to help businesses whose sales are declining, a new funding framework with a 0% interest rate until the end of the month has been established. Fintech companies in Japan have launched initiatives to support credit to SMEs.359 On 4 April, it was announced that private lenders would provide interest free loans to small firms.360 Furthermore, maker of office equipment are supporting SMEs with digitalisation.361 KoreaBetween 7 February and 3 March, the financial sector (from both state-invested banks, private banks and credit card companies) provided financial support directed at SMEs worth EUR 2.1 billion. The Central Bank of Korea has gradually lowerd interest rates. On 17 March, the rate was lowered to 0.75% and on 28 May it was reduced to 0.5%. On 4 March, the Ministry of SMEs and Start-ups announced its plan to provide support worth EUR 1.2 billion as supplementary budget, including the following measures:
Priority is given to regions that were affected the most.365 On 19 March the Government announced a further USD 39 billion package including:
On 23 March, the government announced a further support package of USD 80 billion, with the following measures for SMEs:367
On 25 March, the Ministry of Employment and Labour announced a plan to temporarily increase employee retention support for SMEs to cover up to 90% (from 75%) of their employees’ “suspension period allowance” incurred during their temporary business closure between April and June. The budget increased from KRW 100.4 billion (EUR 74 million) to KRW 500.4 billion (EUR 371 million).368 On 31 March, the government announced an emergency relief payment plan of KRW 9.1 trillion (USD 7.4 billion) to address the virus outbreak. The government plans to pay relief checks to households in the bottom 70 % income bracket (around 14 million households), of up to KRW 1 million (USD 820) per household. For this, a second supplementary budget bill will be submitted to the National Assembly soon. The government also decided to expand social security contribution relief with three-month payment deferrals and 30 % contribution rate deductions for small business and low-income households. On 8 April, the government announced a further package of KRW 53.7 trillion. KRW 36 trillion is allocated to trade finance. The government will extend the maturity of trade insurance and guarantees within a ceiling of KRW 30 trillion. Also emergency liquidity worth KRW 5 trillion is available to help local companies expand overseas activities. The measures also include advanced payments of public investments.369 On 5 May, the government announced it was working on a further support package including an emergency loan programme worth KRW 10 trillion to support small business owners. The affected business owners will be able to borrow loans of up to KRW 10 million from six commercial banks. Those who have already drawn from the emergency fund in the previous round in March are not qualified to apply. Interest rates are expected to be 3-4%, higher than in the first round of emergency loans, to avoid that loans are used for non-business purposes.370 On 12 May, media reported that the Korea Development Bank (KDB) successfully sold local currency-denominated social bonds worth total 1 trillion won (USD 815.9 million) to major local institutional investors with an aim to use the proceeds to help small businesses and dismal job market hit by COVID-19. On 3 June, the government announced the third 2020 supplementary budget of KRW 35.3 trillion (USD 40 billion, 1.9% of GDP) to mitigate the pandemic’s impact. The supplementary budget will strengthen social safety nets, revive consumption and help ailing businesses. The following measures are of particular relevance to SMEs:
On 11 June, the government published an overview of economic measures undertaken.371 On 16 June, Korea’s state-run Industrial Bank of Korea (IBK) offered foreign currency-denominated social bonds worth USD 500 million to raise funds to SMEs struggling to recover from the COVID-19 fallout.372 On 3 July, media reported that the government intends to extend its support measures for small businesses to beyond September.373 Domestic commercial banks and savings banks will also allow loans to be rolled over for small businesses if they cannot afford payment when due. Examples are reported in Korea of SMEs that have received support in recovering from the crisis and now offer support to others.374 Virtual banks have expanded their activities for SMEs during the crisis.375 LatviaOn 20 March, the government has announced the following measures:376
The National Finance Institution Altum provides guarantees for SMEs:
Fintech initiatives are being developed to support SME finance in the context of the crisis.377 The government supports a hackathon among small firms to find solutions to the crisis.378 LithuaniaThe government launched a EUR 5 billion support plan in the week of 16 March, which includes EUR 500 million for maintaining business liquidity and EUR 1 billion for speeding up investment. The measures include:379
Furthermore, the following measures of relevance to SMEs have been put in place:
On 14 April the government approved the temporary provision of rental subsidies to business. The subsidies are to be paid during the quarantine period and the two months thereafter. The total amount available for rental subsidies is estimated up to EUR 100 million. LuxembourgThe Luxembourg Ministry for the Economy has set-up a hotline and website with information for enterprises, which includes a FAQ on existing measures for companies, including SMEs (financial support and partial employment).380 A bill was adopted on 11 March to provide financial aid for SMEs facing financial difficulties as a result of exceptional events such as acts of terrorism, eruptions of a volcano or pandemics like the current outbreak. The government emphasised that SMEs experience more challenges related to liquidity than large companies as a result of such events. The granting of aid through the bill is subject to three conditions:
The costs eligible under the new aid scheme are limited to the loss of income observed. The aid will take the form of a repayable advance.381 The new aim scheme should cover the income lost and ongoing costs of staff and rent, in the form of a recoverable advance. Firms can borrow up to EUR 500 000, up from 200 000.382 Previous legislation on unforeseen events provided for short-time work arrangements.383 On 26 March, the government announced a further support package of EUR 8.8 billion including loans, wage subsidies and tax deferral.384 The measures include:
On 22 April, the government announced it would increase coronavirus lockdown aid to microenterprises, small businesses and craftspeople. Companies employing between 10 and 20 people will be eligible to receive a lump sum payment of EUR 12 500. The EUR 5 000 cash allowance for companies employing less than 10 people has been extended. Originally it was meant for businesses that had to shut their doors based on government safety orders. Now it will also include companies that have reopened with authorisation, but “suffer a loss of at least 50% of their turnover during the period from 15 April 2020 to 15 May 2020”. An additional EUR 5 000 cash grant can be given to companies with less than 10 staff members who remain closed on government safety orders or which have taken a hit of 50% or more to their turnover between 15 April and 15 May.385 In addition to the 6-month moratoria that some Luxembourg banks have voluntarily agreed to implement upon request by businesses, the authorities are also setting up a loan guarantee facility of EUR 2.5 billion, with the State providing a guarantee of 85% on credit lines granted by banks between 18 March and 31 December 2020. On 3 June, media reported on plans for a EUR 150 million loan guarantee scheme.386 MalaysiaNew financing facilities for SMEs have been set up by banks,387 in addition to a decrease in the policy rate.388 Malaysia’s central bank announced on 24 March it requested a 6-month moratorium of all bank loans affected by the outbreak, except credit card balances. On 27 March, the government announced a second round of support measures, bringing the total stimulus up to USD 57 billion, two-fifth aimed at (small) business.389 Bank Negara Malaysia (BNM) has issued a directive to all banks to grant an automatic six-month moratorium of all loan/financing repayments effective from April 1, to September 30, 2020. During this period, borrowers/customers with loan/financing that meet the conditions do not need to make any repayment, and no late payment charges or penalties will be imposed.390 On 6 April, the government announced new measures (RM 10 billion, 0.7% of GDP) to support SMEs, which also includes an enhanced wage support scheme. Through the 27 March and 6 April packages, the following measures have bene put in place of relevance to SMEs:
On 5 June, the government announced its fifth stilumus package of 2.4% of GDP. The Malaysia Digital Economy Corporation, set-up by the government as part of the country’s digital strategy, offers an extensive list of digital solutions for SMEs by Malaysian tech companies.391 MexicoOn 22 March, Mexico announced it works on a people focused support package.392 The Central Bank lowered interest rates to 6.5%. On 3 April, the government announced an economic support package.393 The following measures of relevance to SMEs have been put in place:
Furthermore, the government reinforced existing social programs to support SMEs. The ‘Tandas para el Bienestar’ programme will invest MXN 3.4 billion to grant 450 000 new loans to small businesses. The Mexican Social Security Institute (IMSS) is granting loans of MXN 25 000 at a rate between 6.5% and 10% for formal and informal micro and small enterprises. 394 On 21 April, the Central Bank lowered rates to 6.0%. It announced a liquidity injection of MXN 750 000 million to alleviate liquidity needs of companies through private banking. On 22 April, the Mexican Tax Administration extended the deadline to file the personal income tax declaration from 30 April to 30 June, 2020. On 27 April, INFONAVIT announced that firms up to 250 employees could differ second and third bimonthly 5% housing contributions until September. Firms with 250 employees or more, could defer second bimonthly payment until July. On 27 April, the Federal Government announced that increase in residential electric consumption will not be reclassified to higher tariffs. On 26 April, the Inter-American Development Bank (IDB) and the Mexican Business Council (CMN) have announced a loan scheme that will provide up to USD 12 billion a year to small and medium-sized businesses to help them through the coronavirus crisis. The programme is supported by the federal Finance Ministry and will aim to provide loans to 30,000 businesses. The aim is to offer revolving credit lines with an average term of 90 days. IDB Invest and the CMN are also seeking to build a USD 3 billion program in reverse, factoring lines of credit that would complement existing schemes run by the IDB in Mexico.395 The Mexican government looks at fintech as a means to support financial inclusion, also during the outbreak. A Mexican fintech start-up (Credijusto396) raised USD 100 million in debt that will help it extend more loans to small and mid-sized businesses to respond to the impact of coronavirus. Further private initiatives have developed to support digitalisation of SMEs in the context of the crisis.397 Also, logistic companies are offering SME support.398 NetherlandsThe Netherlands Enterprise agency offers a link with a FAQ. It contains health-related information, but also information for employers on shortening working hours.399 Overall information provision to companies on the outbreak takes place via Chambers of Commerce. On 11 March, the Dutch government announced it aims to introduce further measures to support SMEs hit by the crisis via the opening-up of the guarantee instrument for SMEs (BBMKB)400 for those affected by the outbreak, which according to the government would directly provide EUR 300 million extra credit for SMEs. On 17 March, the government announced it would speed up this process.401 The measures include a tax holiday for affected businesses (concerning corporate income tax, value added tax and payroll tax) and a temporary bridging loans for small and medium-sized enterprises. Furthermore, measures are in existence to allow large and small companies to temporary reduce working time, where the government compensates workers for hours less worked.402 On 15 March, the government announced it stands ready to take further fiscal policy measures if needed, and was studying how self-employed affected by the outbreak can be supported. On 17 March, the government announced a further set of measures for economic support:403
Estimated costs of the measures in the next three months are EUR 10-20 billion. The government also announced that, when necessary, these measures would be further strengthened. Furthermore, on 17 March, the Dutch Central Bank announced it will relax requirements of capital buffers for commercial banks, to support EUR 200 billion in extra credits.405 Similarly, the payment of pension contributions has been relaxed as well.406 On 7 April, the government announced a further set of measures, including:407
On 24 April, the government announced a further set of tax measures to provide financial relief for companies.408 On 25 April the government announced Corona bridge loans for start-ups and scale-ups of between EUR 50 000 and EUR 2 million, for which EUR 100 million will be available. Loans under EUR 500 000 should be available in 4 to 9 working days after request.409 On 7 April, the government announced further support to SMEs through the Small Credit Corona guarantee scheme (KKC). Through the KKC scheme, for which EUR 750 million is available, the government provides 95% of public guarantee for small credits between EUR 10 000 and 50 000 against a maximum of 4% interest, to be provided by banks as well as other finance providers.410 On 20 May, the measures put in place were extended and prolonged.411 On 19 June, the Netherlands introduced conditions to further support to companies related to tax avoidance.412 Dutch provinces such as Overijssel (rapid payments, information for entrepreneurs)413and Brabant (EUR 5 million, information for entrepreneurs414) have also announced measures. On 19 March, the Netherlands Banking Association announced that SMEs with loans worth less than EUR 2.5 million will be granted a six month standstill period in loan repayments.415 New ZealandNew Zealand offers information for (small) business, including on tax relief, redundancy and workplace response.416 On 16 March, the Reserve Bank has announced an emergency policy rate cut by 75 basis points, to 0.25%, accompanied by forward guidance saying this is for at least 12 months. At the same time, the Reserve Bank announced further measures to support commercial banks to strengthen liquidity.417 On 17 March, the government launched a NZD 12.1 billion business continuity package, including wage support and tax measures.418 The package includes:
On 20 March, the Reserve Bank of New Zealand (RBNZ) announced measures to supply banks with more liquidity via both Foreign Exchange swaps and the reinstated Term Auction Facility, which offers banks term funding of up to one year against a range of collateral. On 23 March, the government announced a further package of NZD 6.2 billion dollar to lend money to small business.419 This includes:
Early April, the government introduced insolvency law changes during COVID-19, including a business debt hibernation regime (providing businesses with an option to place existing debts on hold until they can start trading normally again) and a safe harbour regime (offering security to directors against legal claims).420 On 14 April, the government announced a further set of measures to support small businesses, including:421
On 1 May, the government announced further support measures for SMEs.422 Under the Small Business Cash flow Loan scheme423, the Government will provide interest free loans for a year to small businesses impacted by the COVID-19 economic shock to support their immediate cash flow needs and meet fixed costs. The scheme will provide assistance of up to NZD 100 000 to firms employing 50 or fewer full time equivalent employees and will provide NZD 10 000 to every firm and in addition NZD 1800 per equivalent full time employee. Loans will be interest free if they are paid back within a year. The interest rate will be 3% for a maximum term of five years. Repayments are not required for the first two years. On 3 June, the government introduced compulsory arbitration between landlords and small business tenants in case tenants are not able to pay rents because of COVID-19 related loos in revenue but cannot agree with landlords on a cut in rent.424 On 4 June, the government announced that the measures put in place would be extended and enhanced. The deadline for interest free loans was extended by a month. A new eight-week wage subsidy that is set to start on June 10 will have a reduced requirement of a 40% fall in revenue for businesses to qualify, down from 50%.425 The government has launched an online tool (Cash Flow Forecaster426) which helps small businesses forecast their cash flow in the COVID-19 context. In addition, administrations have been directed to pay their bills within ten working days to support small businesses. Private financiers have promised to support companies under financial strain.427 Further private initiatives have developed on how customers can support small business.428 Also, a campaign that offers free digital bill boarding space for SMEs was set up.429 NorwayThe government announced in the week of 9 March support measures, including:
On 15 March, the government announced it will offer companies at least NOK 100 billion (USD 9.7 billion) in funding in the form of guarantees for loans and bond issues to support the economy during the coronavirus outbreak, half of this for loan guarantees to SMEs.430 On 20 March, the government presented legislation that will temporarily lower VAT, postpone tax-filing deadlines and add worker and business protection of USD 24 billion:431
On 27 March, the government presented a further set of measures, including a company support scheme.433 Government will pay a portion of fixed costs for companies facing significant turnover decrease relating to Covid-19. The outlay is estimated to total between NOK 10 and 20 billion per month (between 1/3 and 2/3 percentage points of annual GDP per month). The scheme is initially planned to last for two months with the possibility of extension. Furthermore, on 27 March, a range of support was announced for innovative and research-oriented businesses. This includes: grants for young growth companies, innovation loans, interest-payment support, grants for private innovation groups, business-oriented research support, capital for funding and matching investments. Through further packages on 13 April and 12 May, the following measures of relevance to SMEs have been introduced:434
On 29 May, the government launched a further package with a focus on recovery:435
PeruPeru has put in place an ambitious package of measures amounting to 12% of GDP.436 On 13 March, the government announced a 90% expansion of Fondo Crecer to allow SMEs to access capital: measures have been taken to speed up the expansion of the Crecer Fund, which has USD 225 million allocated to allow SMEs to access capital. On 24 March, the government has approved a three-month extension for the income tax declaration for SMEs and is granting flexibility to enterprises in the repayment of tax liabilities. On 26 March the government suspended payment of the 10% social security contribution to AFP (private administrators of pension funds). On 28 March, the government announced an overall package of around PEN 90,000 million (USD 26 billion), equivalent to 12% of GDP, including two main areas of intervention: 1) contain the impact of the shock, supporting the most vulnerable and protecting payment chains, worth 8% of GDP (including the joint action with the BCRP to guarantee loans to SMEs, worth 4% of GDP); 2) a second phase aimed at supporting the recovery after the shock. The package included the creation of the "Fondo de Ayuda Empresarial" to support SMEs to secure working capital and/or refinance debts, worth PEN 300 million (USD 87 million). On 27 April, the government announced an expansion of the Fondo de Ayuda Empresarial fund to support SMEs by PEN 500 million (around USD 150 million), which now amounts to a total of PEN 800 million (around USD 236 million). This will support credit guarantees up to a total of PEN 4000 million. The guarantee has been expanded to 98% to all SMEs, and with a grace period of 12 months. In April, the government also introduced a subsidy to cover 35% of the salaries of employees in the private sector who earn up to USD 450 per month. Furthermore, the government launched ‘Reactiva Peru’, a fund of PEN 30 billion (USD 9 billion) that serves as a guarantee of loans for working capital, equivalent to 4% of GDP. In May, one month after the initial announcement, the funds allocated were doubled to USD 17.5 billion). On 12 May, the government published Decreto Legislativo No. 1508 approving the creation of a Government guarantee programme for loans to companies in the financial system for up to PEN 7 million (USD 2 million), with the aim of increasing its capacity to face scenarios of greater demand for liquidity. Furthermore, the government introduced a grace period for the payment of income tax for SMEs and individuals until early June, and a 90% expansion of Fondo Crecer to allow SMEs to access capital. PolandFrom 10 March onwards, Poland has introduced several measures to support the financial liquidity of enterprises through cheap loans and guarantees. These include:437
From 1 April onwards, the following measures (anti-crisis Shield) entered into force of at least 10% of GDP:438
On 8 April, the government launched a PLN 100 billion (around EUR 22 billion or 4.5% of GDP) financial lifeline to companies, to reduce incentives to lay-off workers in the current downturn. The scheme will consist of 3-year zero-interest loans to struggling SMEs (50% of the envelope), micro-enterprises (25%) and large companies (25%). About 60% of total loans could be disbursed in the form of grants (up to 75% for SMEs and micro-enterprises), provided recipients will keep their employees during the loan period. The scheme will be managed by the state-owned Polish Development Fund (PFR), which will fund it by issuing state-guaranteed bonds to be, thereafter, purchased by the National Bank of Poland on the secondary market, as part of its QE programme. Late April, the European Commission gave its consent for Polish authorities to grant state aid to companies for the amount of EUR 7.8 billion, as part of the government's anti-crisis package for entrepreneurs. Micro-enterprises, SMEs, as well as large companies in difficulties will be able to benefit from direct grants, repayable advances, tax benefits and reliefs, tax deferrals or employee compensation payments. In 3 July, the EIB group and the Santander Bank Polska group signed an agreement that would allow for PLN 2.8 billion in funding for SMEs.439 The government supports a hackathon among small firms to find solutions to the crisis.440 PortugalSpecific health guidance for companies has been issued.441 On 9 March, the government announced it was earmarking EUR 200 million in loans to support SMEs.442 This was followed on 10 March by the announcement of the launch of a credit line to support treasury to companies affected by the outbreak, in the initial amount of EUR 100 million.443 The package includes measures to support liquidity but also to support of wages, and includes a EUR 60 million credit line to support micro-companies in the tourism sector. The government proposed extraordinary legislation that will simplify the lay-off regime in companies whose activity is affected by the effects of the Covid-19 pandemic, exemption from contributions to Social Security for up to seven months for companies. Furthermore, there is an extension of the deadlines for compliance with some corporate tax obligations.444 On 13 March, the ceilings for export credit insurance schemes were increased for metallurgic, mould, metal and mechanical industries (+ EUR 100 million), construction abroad (+ EUR 100 million) and short-term exports (+ EUR 50 million). Moreover, firms who had to pay back subsidised loans in the context of the programmes “Portugal 2020” and “QREN” until September 30, have another 12 months to reimburse their loan. On 17 March, the government announced a EUR 9.2 billion stimulus package.445 The package consists of EUR 5.2 billion in fiscal stimulus, EUR 3 billion in state-backed credit guarantees and EUR 1 billion related to social security payments, and will include soft loans, and a delay some tax payments to support businesses.446 The announced measures include:447
On 1 April, the government approved measures to suspend rent payments by vulnerable households and small firms.448 A COVID-19 credit line was opened under the Capitalizar programme to support businesses affected by the pandemic. It is open to businesses that have undergone a drop in sales of at least 20% in the last 30 days (in comparison to the 30 previous days). The total budget allocation is EUR 200 million (for working capital and a scheme known as ""Plafond Tesouraria"" that enables businesses to receive credit with a mutual guarantee from the capitalizar fund). Late April, the government launched a EUR 25 million support initiative for start-ups, which includes five measures:449
Furthermore, the following measures of relevance to SMEs have been put in place:
RomaniaOn 18 March, the government announced a package of RON 30 billion to support companies.451 The measures aim to increase the liquidity of the companies and support the companies that temporarily suspend their activity. The measures include:
RussiaOn 17 March, the government announced a USD 4 billion package to support citizens and the economy, compensating quarantined citizens, including freelancers and the self-employed, for lost income. This includes:453
On 3 May, media reported that so far USD 20 billion had been pledged in support to small business.454 Saudi ArabiaOn 14 March, Saudi Arabia announced a stimulus package, including SAR 50 billion (USD 13.3 billion) for SMEs.455 Under Saudi Arabia's programme, SAR 30 billion will be allocated for banks and financing companies to delay loan payments due from SMEs for six months. The package will provide SAR 13.2 billion to SMEs through bank loans to allow them to continue operations and support growth. SMEs will also get relief from finance costs through a SAR 6 billion loan guarantee programme. On 29 March, media reported on further stimulus of SAR 120 billion.456 Furthermore, the government pledged to help companies struggling with wage payments to Saudi employees. Business can request monthly compensation amounting to 60% of the employee’s salary for three months. Around 1.2 million Saudi nationals are eligible, with a monthly limit of SAR 9 000 (USD 2 400) per person. On 3 May, the government issued a decision allowing private sector companies to reduce salaries by up to 40% and to terminate contracts due to the economic crisis. Guidelines published on 4 May link salary cuts to a proportional reduction in working hours and clarify that the employer has no right to invoke the principle of force majeure unless it has previously received a government subsidy to fight the crisis and can prove a number of basic conditions. On 7 May, the authorities launched a new programme to support the business sector, with a focus on industry and mining. These measures include: deferring and restructuring loan payments, exempting, reducing or postponing payment of fees/fines/tax, automatically renewing industrial licenses and customs exemption, and a 30% discount on electricity bills while offering the possibility of payment deferral. Additional measures strengthen the application of local content and national industry criteria. The General Authority for SMEs (Monshaat) on 4 May reported it had reached 1.14 million viewers of its virtual sessions to promote e-commerce by entrepreneurs.457 SingaporeThe 2020 budget was announced on 18 February, with a special package aiming to support firms and workers (the Stabilisation and Support Package, worth SGD 4 billion). The following exceptional measures were announced as part of this package:458
On 26 March, the government announced a further package of measures of SGD 48 billion, which includes an enhancement of the job support scheme.459 Co-funding of wages for workers will be raised from 8% to 25%. Sectors that have born the impact of COVID-19 will receive higher wage support (50% for the food industry, 75% for aviation and tourism). On 6 April, a further stimulus package was announced (SGD 5.1 billion, 1% of GDP). This includes wage subsidies, cuts in foreign worker levies, an extension on rental waivers, among others. 75% of wages will be paid for April. In addition, on 30 March, the Monetary Authorities of Singapore eased its policy stance. By early May, the following measures of relevance to SMEs had been put in place:
Mid-May, the government announced a fourth stimulus package amounting to SGD 33 billion (6.7% of GDP). The package includes the extension of the wage subsidy scheme from 9 to 10 months and measures to create jobs (healthcare, child education) and to provide training opportunities to the affected workers. The total amount of the supplementary budgets until Mid-May is around 18% of GDP. On 5 June, measures were installed to waive rent for SMEs up to two months.460 Banks are also offering relief measures to their SME customers.461 Slovak RepublicAfter declaring the state of emergency on 15 March, the government introduced further measures in the week of 16 March. On 18 March, legislation was adopted to defer income taxes. On 29 March, the government announced a further set of measures to help companies and the self-employment. The measures include:462
On 14 April, the government announced further measures, including the introduction of a short-time work or “Kurzarbeit” scheme to compensate workers’ pay at companies that have suspended operations or whose revenue has dropped. The state will pay up to 80% of wages of employees, but not more than EUR 880 per month, to companies affected by the crisis.463 On 28 April, the government approved shifting EUR 1.2 billion from unspent EU funds to compensate for the COVID-19 outbreak, EUR 330 million of which would be for small businesses.464 SloveniaOn 10 March, the government presented eight crisis measures of EUR 1 billion to ensure the liquidity of companies, aid in the preservation of jobs, minimise the damage already incurred and guarantee that the situation of companies on the market does not further deteriorate.465 The measures include immediate intervention measures as well as strategic measures for the restructuring of supply chains, and include:
The following further fiscal policy measures of relevance to SMEs have been put in place:
Furthermore, the government temporarily freed small business customers and households from the obligation to pay for the support to producers of power from renewable sources and high-efficiency cogeneration. Additionally, the network charge has been significantly lowered, also as a response to the outbreak of COVID-19.466 A Slovenian energy company is cutting prices by 15% for households and small business from March to May.467 As part of a second stimulus package to help the Slovenian economy cope with the coronavirus epidemic announced in April, the state will provide quick liquidity aid to companies to the tune of EUR 2 billion. Loans to micro companies and SMEs will be guaranteed for up to 80% of the principal, and up to 70% for large companies.468 South AfricaOn 19 March, the Reserve Bank cut the repo rate by 100 basis points from 6.25% to 5.25%.469 On 14 April, the Reserve Bank further cut the repo rate to 4.25%. On 21 May the rate was further cut to 3.75%. The Prudential authority issued a proposal on March 26 effective from April 1st, which includes dropping minimum capital requirements and compulsory reserve funds for lenders, reducing the liquidity coverage ratio to 80% from 100% and relaxing accounting standards when determining potential losses. The 18 March, the government announced a package to support SMEs:470
Furthermore, the following fiscal policy measures have been put in place:
SpainAn inter-ministerial commission to ensure coordination within the federal government as well as an inter-territorial commission for cooperation across different levels of government have been created. On 12 March, a “shock plan” were announced, which includes:472
In total, EUR 18 billion was made available, the bulk of which will be available for SMEs.473 On 17 March, the government announced a further package of EUR 200 billion, EUR 117 billion of which is paid for by the government, the further amount by the private sector.474 The measures include:
The measures will apply retroactively from 14 March onwards.475 On 24 March, the first tranche of loan guarantees amounting to EUR 20 billion was approved, half of which are earmarked for SMEs, guaranteeing 80% of new loans and financing renewals.476 On 25 March, media reported the government will introduce a 2 months freeze in rent payments, which will also be applicable to SMEs and self-employed in difficulty.477 On 27 March, some extensions of the earlier packages were announced. Most notably, dismissals for reasons related to Covid19 will not be considered justified (from March 27 until the end of the health crisis) and temporary contracts cannot be cancelled (they can be interrupted during the crisis but must be resumed after the end of the lockdown). On 31 March, the government announced a third package of measures, which includes:478
On 21 April, the government announced a further package of measures:
Late May, the deferral measures for SMEs were extended by 3 to 4 months.479 On 15 June, the government launched a EUR 3.7 billion for the automotive industry. This package, which includes grants, loans and tax breaks as well as incentives for low emission vehicles and research, will also benefit SMEs in the supply chain.480 On 23 June, media reported the government intends to enlarge its EUR 100 billion loan guarantee fund because of strong demand.481 On 2 July, the government announced a further package of measures of EUR 50 billion, including tax reform to support small business482 and the creation of a 10 billion rescue fund for firms hardest hit by the crisis in strategic sectors, to support their solvency and help their recovery.483 Spain also makes use of innovation policy instruments to boost R&D in manufacturing (in particular in sectors affected by the pandemic) and to support connected Industry 4.0 projects for SMEs. It has various programs in place to support SMEs and self-employed to rethink their business models and strengthen managerial and digital skills. Furthermore, the Acelera PYME programme aims to accelerate the use of digital technologies by SMEs. Private financiers are also stepping in with SME loan facilities.484 A venture capital company works together with start-ups to support local tech talent during the crisis.485 SwedenIn Sweden, the Riksbank indicated on 10 March it stands ready to take measures to improve liquidity in case the economic effects of the coronavirus warrant this.486 On 13 March, it announced it was lending up to SEK 500 billion (about EUR 46 billion) to companies via the banks, to avoid robust companies being knocked out as a result of the spread of the coronavirus. The Riksbank is prepared to take further measures and to supply necessary liquidity.487 On 11 March, the Swedish government announced measures to support companies that suffer financially. These include a proposal to bring forward a measure on reducing work time to prevent layoffs and give companies the opportunity to quickly get started again when the situation turns. It also includes the possibility for companies to get a respite with the payment of employer social security contributions and employees preliminary tax of up to one year at the cost of EUR 27.5 billion.488 More specifically: 489
On 20 March, the government announced a new support package for small businesses:
On 25 March, Sweden announced a further support package for small companies, including:490
On 14 April, the government announced a further reinforcement of its short-term layoffs scheme.491 From 1 May 2020 and for three months, employers will be able to reduce their employees’ working hours by up to 80% (instead of 60%) and the government will bear most of the cost. The wage costs will be reduced by over 70% (previously 50%), while workers will retain almost 90% of their original wage. Combined with the reduced employers’ social security contributions, employer costs can be reduced by up to 86% per cent during May and June. Control mechanisms will be enhanced. On 1 July, support measures by the Riksbank were extended and will also include the purchase of corporate bonds from September onwards to support recovery.492 Several community initiatives have been launched to support small businesses.493 SwitzerlandSwitzerland is providing information for entrepreneurs, including on possibilities for temporary lay-offs and shortening of working hours.494 Companies can apply for part-time unemployment for employees, including subsidies for firms putting staff on shorter working hours.495 On 13 March, Switzerland announced a further set of measures amounting to CHF 10 billion.496 These include:
On 20 March, the government announced a further set of measures of CHF 32 billion, bringing the total to EUR 40 billion. These measures include for business:497
On 3 April, the government announced it would double the value of this coronavirus emergency loan scheme to CHF 40 billion and would also extend loan guarantees, bringing the value of the stimulus package to CHF 62 billion.498 On 20 April, new rules aiming to prevent COVID-19 related bankruptcies took effect. The new regulation provides temporary relief from the requirement to report indebtedness that would normally lead to immediate bankruptcy, as well as an option for a limited, non-bureaucratic deferral of debt linked to the epidemic, in particular for small- and medium-size businesses.499 On 22 April, announced support for start-ups to help overcome COVID-19 related liquidity bottlenecks, which became effective on 7 May. Based on the existing guarantee system, a special guarantee procedure was created to secure bank loans to qualified start-ups. 65% of the guarantee is paid by the federal government and 35% by the canton or third parties. In this way, the federal government and the canton (or third parties) jointly guarantee 100% of an amount of up to CHF 1 million per start-up company. The total amount guaranteed may not exceed one third of the start-up's 2019 running costs.500 On 4 May, the government introduced a two month rent waiver for SMEs and the self-employed that have suffered a decline in operations of over 50%.501 Several cantons have taken measures to help certain economic sectors. For instance, the Canton of Geneva is increasing the money allocated to the Foundation for business assistance by CHF 50 million (for a total of CHF 96 million) in order to make cash advances in the form of interest-free loans. The canton of Vaud announces 150 million francs in business aid (100 million francs for cash advances and 50 million francs for the unemployment insurance fund). The canton of Fribourg releases 50 million francs to support businesses (financing of partial unemployment and guaranteeing bank loans). The canton of Aargau will support the local economy with 500 million francs, including 228 million francs from its 2019 budget surplus. A number of Swiss banks are working on a USD 20 billion lending fund for small businesses affected by the outbreak.502 Several crowdfunding and solidarity initiatives have been launched.503 ThailandThe Bank of Thailand reduced its policy rate from 1.25% to 1.00% on 5 February, and further to 0.75% on 20 March and to 0.5% on 20 May.
The Finance Ministry also set up specific hotlines for SMEs with queries about these measures. On 25 March, the government announced the second stimulus package amounting to 0.7% of GDP. This includes a 5000 THB (USD 150) monthly handout to three million workers, who are not covered by the social security fund, up to three months. Furthermore, it includes the following measures of relevance to SMEs:
On 7 April, the government approved the third stimulus package of THB 1.9 trillion. The government will borrow THB 1 trillion (6.1% of GDP) expected to be used for healthcare capacity enhancement and income support. These measures include:
The government has also taken measures to reduce costs for utility payments for households and firms. On 29 June, the government announced it intends to set up a THB 50 billion fund to support small businesses affected by the pandemic.506 The Bank of Thailand sets up additional liquidity support schemes for private business sectors amounting to THB 0.9 trillion (5.5% of GDP). The Bank will allocate THB 500 billion for soft loans to SMEs. SMEs will be able to borrow a maximum of THB 500 million at an annual interest of 2% and interest-free for the first six months. Also, a loan payment holiday of 6 months was introduced for all SMEs with a credit line not exceeding THB100 million, to provide the much‐needed liquidity to the SMEs. TunisiaOn 22 March, the government announced a series of economic and fiscal measures amounting to an estimated TND 2,500 million (around 2.2% of GDP). These include the following measures for business support, particularly for SMEs:
On 2 April, the government announced the launch of web portals to help crisis-affected artisans, traders, SMEs and other companies. The companies concerned must be affiliated to the National Social Security Fund, or will be affiliated within a maximum period of one month from the date of government publication. The conditions require that the company's employees be registered and their wages declared to the National Social Security Fund for the fourth quarter of 2019 or the first quarter of 2020. The companies concerned must also provide the necessary documents proving financial difficulties, the decline in activity and liquidity difficulties. Maintaining employees, whether indefinite or fixed-term, of the entire workforce of the company whose employment contracts are in force on the date of the government decree coming into force, is one of the conditions. On 3 April, the government announced the additional measure of TND 100 million to cover partial unemployment for the benefit of artisans and SMEs. On 13April, the government adopted a first series of decree-laws to cope with the Covid-19 crisis, such as social measures to support companies and their employees, as well as exceptional measures for self-employed individuals. The measures include the temporary social measures to protect businesses and their employees affected by the total lockdown: provisional and exceptional indemnities as well as the deferral of payment of contributions payable by employers in the statutory social security scheme for 2020Q2, for three months without penalties for a delay. This decree-law defines affected companies as being those companies affiliated to the National Social Security Fund (CNSS) and whose activity is temporarily interrupted because of total lockdown. On 3 May, the Minister of Finance announces that the total credit guarantee mechanism for crisis-affected companies has been increased from TND 500 million to TND 1500 million. A company is considered to be affected if it records a decline of at least -25% in turnover in March 2020 (year-on-year), or -40% in April 2020 (year-on-year). The state guarantee will amount to 70-90% of the total credit amount, via the Tunisian Guarantee Company (SOTUGAR). Participating banks must offer a rate that does not exceed a rate equal to the average monthly money market rate +1.75%. On 5 May, the Ministry of Finance decided, with the Tunisian Solidarity Bank (BTS) and the Ministries of Social Affairs and Transport, to allow taxi owners of all types (individual, collective, rural transport and hire) to benefit from current loans at reduced rates via the BTS. These loans will be allocated to pay the insurance costs for a full year, with two months of grace period and without commissions or additional costs. On 6 May, the government adopted several economic measures to support the media sector, such as: The state will commit to pay 50% of the broadcasting costs of the year 2020 for all the private radio and TV channels; And a budget allocation of TND 5 million for the financing of the sector's digital transition process. On 8 May, the government published 2 decrees to specify which companies can benefit from fiscal and financial measures to alleviate the impact of the Covid-19 crisis. These measures include the provisional cancellation of fines for the late payment of taxes and credit lines to be used for the refinancing of rescheduled credits for the benefit of SMEs. The decree states that sole proprietorship businesses can benefit from these measures, whereas companies subjected to the flat-rate scheme, oil producing companies and companies subjected to an income tax rate of 35% are excluded. TurkeyOn 17 March, the Turkish Central Bank cut its key interest rates by 100 basis points.507 The bank said it would also provide banks with as much liquidity as they need through intraday and standing overnight facilities. On 18 March, Turkey launched a USD 15.3 billion 21 point stimulus package (Economic Stability Shield) to tackle the coronavirus pandemic. The package includes:508
Furthermore, measures have been taken by the SME Development Organisation KOSGEB:509
On 22 March, public banks Ziraat Bankası, Vakıfbank and Halkbank, and three private banks (İşbank, Akbank and QNB) announced support packages to the enterprises and individuals regarding the issue. 510 All individual and corporate clients are allowed to postpone interest and principal payments due on 31 March. The state bank said it will allow restructuring of loans with up to 12 months of additional time for sectors such as hard-hit tourism, as well as up to a six-month non-payment period. On 31 March, the government started a campaign for public donations to support those affected by COVID-19.511 On 27 April, the Union of Chambers and Commodity Exchanges of Turkey (TOBB), jointly with private lender Denizbank and the Credit Guarantee Fund (KGF) announced the launch of a new loan package for SMEs. The package will create TL 6 billion (USD 859 million) in loan opportunity for the SMEs in two months, with the maximum loan amount varying between TL 50 000 and TL 100 000 depending on the province. While the interest rate is determined as 7.5% in the package, there will be no principal and interest payments this year.512 On 21 May, media reported that the EBRD provides EUR 50 million to support Turkish SMEs.513 On 7 May, the Saudi Arabia-based Islamic Development Bank (IsDB) announced it has signed a syndicated USD 100 million murabaha contract worth with Turk Eximbank to support SMEs and mid-cap companies in Turkey amid the coronavirus pandemic. The murabaha facility, a mode of interest-free financing, has time to maturity of ten years and is expected to increase companies' export capacity and workforce and sustain or create at least 1,000 jobs. The facility follows a USD 270 million line of financing extended by the IsDB to 57 Turkish firms, including 18 SMEs, via Turk Eximbank.514 Other banks are deploying SME oriented initiatives as well.515 On 3 July, the Asian Infrastructure Investment Bank announced it was lending USD 500 million to Turkish development banks to support SMEs.516 UkraineThe government has suspended the requirement to pay tax on commercial real estate and land, defined COVID-19 quarantine as a force-majeure for legal contracts, suspended tax inspections of companies, expanded the government programme of affordable bank loans at discounted interest rates for businesses, suspended the submission of income declarations until July, eased transaction registration rules for certain categories of entrepreneurs and reemphasised the right not to pay rent of citizens who cannot use their property due to quarantine. Entrepreneurs have also been exempted from having to pay social security contributions. On 26 March, state-owned PrivatBank announced a “credit holiday” for small and medium-sized businesses until the end of May.517 On 30 March, entrepreneurs have been exempted from having to pay social contributions in March and April. No penalties will be applied for late or incomplete payment of the Single Social Contribution (SSC) tax, as well as late reporting on the SSC for the periods from 1 to 31 March and from 1 April to 30 April 2020. The government has also expanded the affordable loans ”5-7-9” credit subsidy and guarantee scheme (launched in February 2020): the maximum amount of loan was increased to UAH 3 million (about USD 100 000), the annual income limit to UAH 100 million (USD 3.7 million), and the uses has expanded to include COVID-19 crisis related production as well as production costs (e.g., wages, rent, etc.). A second programme for entrepreneurs and medium-sized firms is being developed. United KingdomIn its first response, the UK government provided generic guidance for employers and business on how to deal with the health risk.518 Furthermore, the Department for International Trade was supporting UK businesses to relay public health advice and provide practical support, including regarding access to existing UK Export Finance facilities.519 The Bank of England (BoE) on 11 March lowered interest rates to 0.25%.520 The measures include a new Term Funding scheme for Small and Medium-Sized Enterprises, supporting cheap business loans of GBP 100 billion for SMEs, funded by the central bank.521 Over the next 12 months, this scheme will offer funding of at least 5% of participants’ stock of real economy lending at or close to Bank Rate, for a period of four years. Additional funding will be available for banks that increase lending, especially to SMEs. This aims to spread the reduction in Bank Rate to the real economy and incentivise banks to lend to SMEs and households.522 On 19 March, the BoE announced to increase its holdings of UK government and corporate bonds by GBP 200 billion to a total of GBP 645 billion. It also extended its Term Funding Scheme for Small and Medium-sized Enterprises. On 11 March, the UK Government announced a GBP 30 billion emergency stimulus package, 23% (GBP 7 billion) of which is aimed at business support.523 As part of the package:
It was announced on 11 March that the self-employed and gig economy workers, who are not entitled to sick pay, would receive assistance worth GBP 500 million as part of the 2020 Budget. The new Self-employed Income Support Scheme will pay self-employed a taxable grant of up to 80% of their previous earnings over the last three years (capped at GBP 2 500 a month and open for self-employed with average profits of less than GBP 50 000). The scheme will start in June and run for at least three months. It will add around 4.2 billion (or 0.2% of GDP) to public debt if take up is around 1 million self-employed over three months. Self-employed will also get access to Universal Credit (UC): The government suspended the minimum income floor of UC and increased the UC allowance by GBP 1 000 for the next twelve months. On 17 March, the government announced a further GBP 330 billion rescue package of loan guarantees for business.525 The measures include:
Furthermore:527
On 23 March, the government announced that commercial tenants protected from eviction.528 On 28 March, the government announced temporary changes in insolvency law to provide a breathing space for companies.529 The changes include the suspension of the application of the law on wrongful trading; and a new restructuring regime known as a 'business rescue moratorium', designed to (i) prevent creditors from taking enforcement action whilst the business seeks a rescue/restructure, and (ii) permit the business to continue to access the supply of goods and services necessary to continue to trade. On 20 April, the government announced a GBP 1.25 billion support package for start-ups, tech companies and other innovative firms.530 This includes:
On 4 May, the government launched a bounce back loans scheme for small firms and sole traders. Under this scheme, firms can be 100% backed government loans of between GBP 2 000 and GBD 50 000 against 2.5% interest. For the first 12 months, the government will pay fees and interest on the loans, with debt repayment only starting after that period. Applying to the loans is simplified; the loans should be available a few days after application.531 From 13 May onwards, self-employed can apply for a GBP 7 500 grant in income support.532 On 8 July, the government announced a further GBP 30 billion economic support package.533 As part of the scheme, the government provides a grant for small businesses to take on young people as trainee.534 On 16 March, the UK government announced devolved administrations will receive GBP 1.5 billion to counter the effects of the outbreak, which was subsequently raised to GBP 3.5 billion.535 Small businesses in England that already pay little or no business rates will be eligible for a one-off coronavirus grant of up to GBP 3 000.536 Furthermore, one-off cash grants between GBP 10 000 and GBP 25 000 are available for business with a property used for retail, hospitality or leisure. Grants will depend on the value of their properties, and will be capped at rateable values below GBP 51 000. Business in these sectors will also get a relief from business rates on property, irrespective of their rateable value. On 17 March, Wales made available GBP 200 million for small businesses,537 as part of a GBP 1.4 billion support plan for business.538 The Scottish government launched a helpline for small business to cope with the outbreak.539 On 14 March, the Scottish government announced a GBP 320 million rescue package for business, which includes:540
On 30 March, the Scottish government announced a further support measures for business of GBP 100 million:541
In Northern Ireland, the government announced on 5 May a GBP 50 million support scheme for SMEs targeted to microenterprises that so far had not received support under the GBP 10 000 grant scheme for SMEs.543 Private financiers in the UK announced that they would ease rules for firms affected by the outbreak. On 10 March, a GBP 2 billion finance package was announced by Lloyds, free of fees (conditional on revenue below GBP 25 million). Measures from other commercial banks include putting a mortgage holidays, a 12-month capital repayment holidays for SMEs with existing loans above GBP 25 000, refunds on credit card cash advance fees, temporary increases to credit card limits, and a suspension of borrowing fees.544 Furthermore, peer-to-peer financial platforms are offering their assistance to SMEs.545 Large supermarket chains announced they would speed up its payments to small business suppliers.546 A business banking platform and an insurance platform launched an initiative to support SMEs in countering late payments by customers during the pandemic.547 Also, digital platforms are launching small business and start-up support.548 United StatesGeneric health advice was published for employers in the US by the federal government.549 Furthermore, the US Chamber of Commerce Coronavirus Resource Page includes information for businesses550, including on disaster relief, which is available through the SBA.551 On 3 March, the Federal Reserve cut the interest rate by half a percentage point.552 On 15 March, the Federal Reserve further reduced rates by another percentage point with interest rates now amounting 0-0.25%. Furthermore, it announced buying USD 500 billion in obligations and USD 200 billion in commercial debt. The Federal Reserve also made it easier for commercial banks to make use of central bank liquidity by lowering rates with 150 basis points.553 On 17 March, the Fed announced it would reopen the so-called Commercial Paper Funding Facility to underwrite the short-term loans that companies often use to pay for their operations, a key financial market backstop first set up 2007 to 2009.554 On 6 March, the government launched a USD 8.3 billion spending bill, with an emphasis on health measures. On 10 March, the House Committee on Small Business held a hearing on the impact of the coronavirus on small business.555 The Administration on 13 March announced its intention to make USD 50 billion available for loans to small businesses.556 The announced measures instructed the Small Business Administration to use emergency power under the Economic Injury Disaster Loan Assistance programme to provide capital and liquidity to firms affected by coronavirus. The Small Business Administration will offer low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). A request of USD 50 billion (around 0.25% of GDP) will be made to Congress to provide low interest loans. The Treasury will defer tax payments without interest or penalties with the aim of shoring up liquidity. On 18 March, Congress passed a second bill (Families First Coronavirus Response Act) of USD 100 billion primarily aimed to address the spread of the coronavirus and soften the blow to households, including resources for paid sick leave. The bill provides for free testing for the coronavirus, 2 weeks paid sick leave (capped) and then additional paid sick leave for workers with children for up to 3 months. Additional resources were devoted to providing food for households with low income. Money was also targeted to support the expected increase of unemployment insurance, which is administered by the states. The bill also increases Medicaid payments to states. On 23 March, the FED introduced a further set of measures, including to support the flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will provide up to USD 300 billion in new financing. The Department of the Treasury, using the Exchange Stabilization Fund (ESF), will provide USD 30 billion in equity to these facilities. 557 Late March, a third package of economic stimulus was agreed upon (CARES Act) which amounts to USD 2.2 trillion and includes direct lump sum payments to citizens, a reduction in pay-roll taxes, and USD 50 billion for the airline industry.558 Businesses of all sizes will benefit from USD 221 billion in tax reductions and deferrals. These include a 50% of payroll tax credit for severely affected businesses that do not benefit from business interruption loans and agree to maintain employment levels. Payroll tax payments for 2020 are deferred to 2021 and 2022. Businesses will be allowed to carry back losses during 2018, 2019, and 2020 for 5 years and eligible for immediate refunds. Various aviation taxes are suspended for the remainder of 2020. The CARES Act also provides USD 500 billion to Exchange Stabilization Fund at the Treasury. In turn, the Treasury will use these funds to support businesses, cities and states that have been hard hit by the coronavirus. Of this, the CARES Act allows the Treasury to make loans to airlines, air cargo, and national security critical firms of USD 25 billion, USD 4 billion, and USD 17 billion, respectively. The remaining USD 454 billion will provide equity to the Federal Reserve to establish lending facilities for other businesses. Such lending facilities could support around USD 4 trillion in business loans. USD 349 billion is included to support business interruption loans for small businesses without interest of up to USD 10 million (Payment Protection Plan, PPP). Principal on these loans that small businesses (fewer than 500 employees) used for payroll, rent, interest on existing obligations, and utilities for eight weeks will be forgiven if such small business maintain pre-crisis employment levels. Thus, these business interruption loans – administered by the SBA - are effectively grants to keep workers on the payroll during the crisis. In addition, airlines, air cargo, and support firms will receive grants of USD 25 billion, USD 4 billion, and USD 3 billion, respectively, to maintain employment levels through 30 September 30. On 16 April, the administration proposed guidelines for states on lifting the lockdown, through a three phase approach. On 24 April, a bill was signed that made a further USD 310 billion available for the PPP. The bill also included an additional USD 60 billion for the Small Business Administration’s Economic Injury Disaster Loan program.559 Early July, the deadline for PPP loan applications was extended to 8 August 2020.560 On 30 April, the Federal Reserve announced it was expanding the scope and eligibility of its Main Street Lending Program which is designed to provide up to USD 600 billion in loans to small and mid-size businesses that have been harmed by the pandemic and the efforts to contain it. 561 Early May, the US Patent and Trademark Office announced a new fast-track program that allows small businesses working on COVID-19 related drugs or treatments to patent their innovations in less than 6 months.562 Many US States have announced support measures for small businesses, including New Mexico, Ohio, Maine, Massachusetts, Michigan, New York, Oregon, Wisconsin and Florida. A substantial number of states include tax measures in their support.563 Several cities launched support as well:564
Furthermore, there are several initiatives of digital services providers who offer help to small business,568 as well as banks569, Fintech companies570 business service providers571, credit card providers572, and small business relief funds of large tech companies.573 An example is the stand for small initiatives by various large companies to help small business.574 Community initiatives have been launched as well such as the Start Small, Think Big campaign.575 In various places, MBA students have launched initiatives to support small businesses.576 VietnamThe Central Bank of Vietnam has reduced interest rates from 6% early 2020 to 4.5% on 12 May. Vietnam assists companies struggling amid the coronavirus outbreak with tax breaks, delayed tax payments and reductions in land lease fees. The assistance package totals USD 1.16 billion.577 Several commercial banks have already lowered interest rates for businesses affected by COVID-19. Textiles businesses, including several with no prior experience, have begun producing antibacterial masks after authorities announced a daily need of 10 million.578 On 10 April, the government approved an additional relief package amounting to VND 62 trillion (1.1% of GDP). This includes cash handout to 20 million people and employers can borrow money at zero interest rate to pay salaries. On 11 March, the Ministry of Finance submitted a measure to defer tax payment (personal and corporate tax, including value-added tax, income tax, land lease) by five months for certain sectors, for a total of VND 30 trillion. On 15 March, the Ministry of Labor-Invalids and Social Affairs gave permission to firms to request late payment of social security contributions. On 26 March, the Ministry of Finance submitted a draft legislation to defer tax payment of five months for firms and self-employed for a total of VND 80.2 trillion, of which VND 61.6 trillion for VAT, VND 11.1 trillion of corporate income tax, VND 3 trillion of income tax for self-employed, VND 4.5 trillion of land lease. On 8 April, Resolution 41 deferred tax payment (VAT, corporate and personal income tax, land lease) by 5 months without penalty. On 10 April, 2020, Resolution 42/NQ-CP approved a support measure worth VND 62 trillion (USD 2.66 billion) to support people from April to June, and firms affected by COVID-19 during this period. Firms who have put employees to unpaid leave for three months, but cover at least 50% of the salary will be entitled to borrow from Viet Nam Bank for Social Policy (VBSP) at zero interest rate to cover the salary payment, backed by a VND 16 trillion of credit line to VBSS. The government included a corporate tax rate cut for SMEs of 0.4% of GDP as part of its policy response. Which policies would tend to foster entrepreneurship?4 State Policy Fixes to Foster Entrepreneurship and Startups. Reinvestment Of Local Wealth. ... . Less strict enforcement of non-compete agreements. ... . Companies Reinvest Profits Paying No Tax. ... . Safety Net For Future Entrepreneurs.. What did Peter Drucker say was the most important factor of production?Knowledge is now fast becoming the one factor of production, sidelining both capital and labor. This change means that we now see knowledge as the essential resource.
What is an entity that seeks to earn a profit by providing a good or service?Key Takeaways. A business is an entity that seeks to profit from a product or service.
Which of the following policies would be least likely to encourage entrepreneurship?Passage of laws that eliminate corruption in government and business is a practice that is least likely to encourage the process of entrepreneurship in the society.
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