The EU Commission on Thursday approved two separate UK State aid schemes to support small and medium-sized enterprises (SMEs) in the context of the coronavirus outbreak.
The schemes were approved under the State aid Temporary Framework to support the economy in the context of the COVID-19 outbreak adopted by the Commission on 19 March 2020.
The UK support measures
The UK notified to the Commission two separate aid schemes to support SMEs affected by the coronavirus outbreak under the Temporary Framework.
The UK will set up the so called "Coronavirus Business Interruption Loan Scheme" (CBILS) which will provide respectively:
(i) Under the first support scheme, guarantees that cover 80% of loan facilities for SMEs with a turnover of up to GBP 45 million (approximately € 49 million) to cover their working and investment capital needs. This scheme will be implemented through the British Business Bank, a national promotional bank.
(ii) Under the second support scheme, direct grants to support SMEs affected by the coronavirus outbreak. The overall budget for this scheme is GBP 600 million (approximately € 654 million).
The beneficiaries of the schemes are SMEs active in all market sectors having temporary financial difficulties due to the economic impact of the coronavirus outbreak.
The Commission found that the UK schemes are in line with the conditions set out in the Temporary Framework. In particular:
(i) With respect to the guarantee scheme, (i) the underlying loan amount per company is linked to the company's liquidity needs for the foreseeable future, (ii) is limited to a maximum six-year duration, (iii) and entails a guarantee premium that is at least as high as that set in the Temporary Framework. Furthermore, the scheme includes safeguards to ensure that the advantages of the guarantee are effectively passed on to the borrowers and that the lending is used to cover short-to-medium term liquidity needs.
(ii) With respect to the direct grants, the support per company will not exceed €800 000 (around GBP 734 000) per company as foreseen by the Temporary Framework. Futhermore, the grant amount per company is linked to the market sector in which the company is active, as also foreseen by the Temporary Framework.
The schemes will initially run until 30 September 2020, with the possibility for the UK to extend them until 31 December 2020.
The Commission concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.
On this basis, the Commission approved the measure under EU State aid rules.Ακολουθήστε το Agrocapital.gr στο Google News και μάθετε πρώτοι τις ειδήσεις