There are several banks providing soft loans in the times of the spreading coronavirus as a financial and economic stimulus. Recipients of the financial aid should be small and medium-sized enterprises and the self-employed. To get an interest-free loan, they need to meet the following requirements:

• carry out their business activities for at least 1 year;

• maintain employment rate;

• no debts as regards social and health insurance levies at the end of the respective period.

Slovenská záručná a rozvojová banka (Slovak Guarantee and Development Bank) has been providing soft loans since 20.04.2020 and on 27.04.2020 also Eximbanka (EXIM) joined in. Recipients of the financial aid may apply for the soft loan in several commercial banks, too. Let's sum up what conditions financial institutions laid down for obtaining the soft loan.

Basic prerequisites of the Slovak Guarantee and Development Bank and EXIM in providing the financial aid:

• loan amount may not exceed 50% of the 2019 turnover;

• small and medium-sized entrepreneurs must carry out their activity for at least 1, or 2 accounting periods;

• Slovak Guarantee and Development Bank will provide loans from EUR 10 000 to EUR 350 000 and EXIM from EUR 100 000 to EUR 500 000;

• loan term of 3 years;

• deferral of the repayment of the principal for 1 year, with the loan being repaid in the remaining 24 months;

• individual guarantee in the amount of 80% of the loan principal remainder;

• interest rate of 4,00% p.a. as a fixed rate for the whole period;

• bonification of the whole interest rate (ergo an interest-free rate, if conditions are met);

• payment of the interest rate bonification will start upon expiry of the one-year loan deferral, if small and medium-sized entrepreneurs manage to maintain employment rates during this one-year deferral and have no debts as regards social and health insurance levies that are more than 1 month overdue at the end of the one-year loan deferral.

In cooperation with Slovak Investment Holding, a.s., also commercial banks are launching the financial aid. 9 commercial banks expressed their interest, and three of them - Slovenská sporiteľňa, Všeobecná úverová banka a BKS Bank – have already signed the contracts and are in the process of implementing the product into their existing portfolio of services. It will be an offer of soft loans with a guarantee from Slovak Investment Holding, a.s. and interest rate bonification conditioned on the fact that the employment rate is maintained. Entrepreneurs may apply for soft loans directly at the banks that joined in the aid scheme. Slovenská sporiteľna is already offering this product.

Commercial banks will provide the financial aid in the form of:

• soft loan (with lower interest rate and lower guarantee than usual);

• interest rate subsidy.

Recipients of the financial aid from commercial banks are once again small and medium-sized enterprises and the self-employed that need to meet the following conditions to obtain the interest rate subsidy of up to 4% p. a.:

• maintain the employment rates from the period of the loan drawdown for at least 1 year after the drawdown ended;

• at the end of the period their debts as regards social and health insurance levies must not be higher than at the time of the loan drawdown.

Basic characteristics of a soft loan:

• loan amount up to EUR 1 180 000,-;

• loan term of 4 years;

• deferral of the repayment of the principal and the interest rate for 1 year, with the loan being repaid in the remaining 36 months;

• interest rate will be (if the requirements for the interest rate subsidy are met) reduced by the maximum of 4,00% p.a. for the whole loan term and will also be awarded retrospectively for the period of the repayment deferral;

• payment of interest rate subsidy will start upon expiry of the one-year loan deferral, if entrepreneurs manage to maintain employment rates during this one-year deferral and have no debts as regards social and health insurance levies that are more than 1 month overdue at the end of the one-year loan deferral.

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Wishing you good health!