Belgian government backs loans to stricken businesses

Key ministers joined by representatives of opposition parties supporting the corona emergency government have approved 50 billion euros’ worth of state guarantees to loans that may be granted to businesses facing bankruptcy as a result of corona.   

In recent days banks received numerous bridging loan requests from businesses in sudden financial distress linked to the corona crisis.  In only a week’s time Belgian banks agreed to grant a six month pay holiday on 86,000 loans.  The government is now releasing cash to underwrite loans to ensure banks don’t suffer financially if borrowers can’t repay.

Details of the criteria that will be used to decide which companies can qualify for a bridging loan guaranteed by the state have now been agreed.  Banks will be able to use the new criteria as early as next week.  All new loans and credit lines with a maximum length of 12 months granted to viable non-financial businesses, independent professionals and non-profit organisation before 30 September will qualify for a state guarantee.