The Malta Development Bank COVID-19 Guarantee Scheme is a government backed scheme which secures bank loans for eligible and viable businesses who may need to respond to cash flow and liquidity pressures resulting from the adverse business conditions following the COVID-19 outbreak.
This could be the right solution for you if you are an existing HSBC Malta business customer:
- looking for financial support through the short-term uncertainty due to COVID-19.
- looking to increase your working capital funding.
The Malta Development Bank has launched the COVID-19 Guarantee Scheme (CGS) which is intended to fund new working capital facilities for business customers established and operating in Malta.
The time window for application to the scheme has been extended up to the 30th of September 2021.
Key features and benefits:
- A Government guarantee which secures 90% of bank loans to any viable & eligible business with a sound borrowing proposal, but which may lack adequate security.
- A loan term of a minimum of 18 months to a maximum term of 6 years is permitted under the terms of the Scheme, however this will be considered by the Bank on a case by case basis.
- Discounted upfront one-time arrangement fee of 0.3% of loan amount, minimum of €100.
- Scheme entails government guarantee fee of between 0.15% and 2.00% per annum, depending on business size and loan tenor.
- Loan amounts between €20,000 and €25,000,000 depending on business size. Loan amounts must not exceed double the 2019 wage bill or 25% of 2019 turnover or justified customer provided self-certification of liquidity needs for 18 months in case of SMEs and 12 months in case of Large Enterprises.
- Interest rate will depend on individual circumstances, starting from 2.5% up to a maximum rate of 3.75%. Customers are eligible for an interest rate subsidy of up to 2.5% for the first two years from first drawdown, however customers must pay a minimum of 0.1% (e.g. if all-in interest rate is 2.5%, then customer will pay 0.1% and subsidy will be of 2.4%). Customers must provide a declaration in order for them to be eligible for and provided with the subsidy.
- Moratorium: minimum mandatory period of 6 months and up to18 months at the Bank’s discretion on a case-by-case basis. The moratorium applies to both interest and capital repayments.
- No early repayment charges, should you wish to repay early.
- No urgent lending request fee.
You may need to provide the following, but not limited to, documentation as applicable:
- Copy of the last 2 years’ financial accounts
- Cash flow forecast (covering the next 12 to 18 months), including impact of any other related COVID-19 support on cash flow
- Business plan, including 2021 and 2022 budget and year to date management accounts, and management action plan / steps being taken to address COVID-19 impact
- Overview of existing borrowing facilities (across all lending institutions)
- Security currently provided in relation to business borrowing facilities and potentially available (if any)
- Estimated borrowing requirement and for what period
- For any further enquiries, please contact your relationship manager. Fusion customers may visit one of our branches or call on 2380 2389.
- To apply for a loan under the COVID-19 Guarantee Scheme click below