The Maltese Government has on the 16th April 2020 announced that it will be subsidizing interest rates on the working capital loans for two years and up to a maximum 2.5%.
The purpose of the interest subsidy on bank loans, is to support affected businesses in responding to challenges and opportunities associated with the current COVID-19 pandemic. Enterprises from various sectors will benefit from this assistance as they will have more access to bank financing for the working capital funding necessary for their business operation. Those businesses who experienced sudden liquidity shortage during the outbreak will be primarily relieved by this assistance.
In cases where in the interest rate charged by the bank is 2.5%, the Government will subsidize 2.4% while the borrower will be paying the minimum rate of 0.1%. However, where the interest rate is higher than 2.5% thus exceeding the maximum threshold of the subsidy, the Government will pay out 2.5% while the borrower will pay the remaining percentage. The assistance will be given to those who enterprises in need of assistance. The subsidy will not be applicable to bank loans acquired for the purchase of property.
A number of local banks agreed with the Government to assist local businesses to benefit from the subsidy. The banks are Bank of Valletta, HSBC, APS, MeDirect, BNF, Lombard Bank, Izola bank, and FCM Bank. Each bank will apply its own interest rate and applicants should pass the bank’s eligibility criteria.