On June 13, the Minister of State, Economy and Digital Transition, Pedro Siza Vieira, presented the measures for economic recovery and business capitalization, after an "unprecedented economic downturn" caused by the pandemic.
In that presentation, the Minister also referred, regarding Banco Português de Fomento (BPF), that it “is the cornerstone for the transformation of the Portuguese economy” and that “it will play a key role in the implementation of the Recovery and Resilience Program (PRR), through the execution of investments and support to the financing of private sector projects in the green, digital and resilience dimensions».
A reference was also made to the Capitalization and Resilience Fund (1 million), the Minister stated that this measure has the mission to "promote the continued effort to capitalize and access financing for non-financial companies, with particular emphasis on the necessary reinforcement of solvency for the period of economic recovery and recovery" .
New measures for the recovery of the sectors most affected by the Covid-19 pandemic, two important instruments are highlighted: o "Resume" Program, directed at credit in default, and the “Reinforce” program, which intends to be an incentive to the capitalization of micro and small companies.
Objectives of the Resume program
- “release liquidity for the recovery of economic activity through the relief of financial obligations”;
- “public encouragement to renegotiate the terms of credit in bank moratoriums in the sectors most affected by the pandemic crisis”;
- «public guarantee of up to 25% on existing credits, ensuring a new grace period and extension of maturity»; and
- “Guarantee commission at the minimum levels authorized by the European Commission”.
Objectives of the Reinforce program
- «promote the reduction of indebtedness of micro and small companies»;
- “amortization of debt with public guarantee contracted by micro and small companies, to face Covid-19”;
- “public subsidy that accompanies the capitalization carried out by the partners of companies with the biggest drop in turnover (over 40%), in the most affected sectors”;
- subsidy “of one public euro for every private euro”; and
- 'awarding of a subsidy in the form of reimbursement for the first due installments'.
At DFK, we are available to inform and provide the necessary advice to companies in carrying out a prior assessment of the impacts of these instruments on their financial structure.
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