Czech Republic To Offer Interest Free Loans

The Czech government approved interest-free loans for companies affected by the coronavirus.

Businesses will be able to obtain interest-free loans beginning in April due to problems caused by the coronavirus. The government set aside CZK 600 million for loans. Companies can apply for money through the Czech-Moravian Guarantee and Development Bank (ČMZRB).

Businesses will be able to apply for an amount of between half a CZK 500,000 and CZK 15 million. They would receive an interest-free loan. The program also applies to cases where the measures introduced by the Czech government have hurt companies.

Businesses will have to prove the coronavirus has directly affected them. For example, because they have quarantined employees or the situation has impacted direct trades tied to countries such as China, Italy, South Korea.

Companies affected by workers’ quarantine due to coronavirus would also benefit from a temporary deferral of payments or taxes in addition to interest-free loans. President of the Chamber of Commerce Vladimir Dlouhy wants to promote it at an evening meeting between representatives of government and companies.

According to the government’s program, businesses should receive no more than 90 percent of the harm they quantify. Small and medium-sized enterprises could finance small assets or inventories from a loan, and companies over three years of age could also finance wages or receivables.

Ministers will discuss possible measures for economic policy with stakeholders so that the economy is supported if the situation worsens.

The President of the Chamber of Commerce said the government should avoid pressure on the Czech National Bank to reduce interest rates. A two-week quarantine preventing a tenth of the population in the Czech Republic from working would cost CZK 23.5 billion, or 0.4 percent of gross domestic product, the Chamber said.