Malta Enterprise has launched the Micro Guarantee scheme, through which enterprises with less than 20 workers – including start-ups and self-employed – may be granted a guarantee to help them secure a loan from commercial banks participating in the scheme.
The Micro Guarantee scheme, which enters into effect on August 1, 2012, will therefore facilitate access to loans of up to €100,000 for eligible enterprises, which may use the funds to finance projects leading to business enhancement, growth and development. Malta Enterprise will receive applications for support under this scheme until December 1st, 2013.
Beneficiaries of the scheme will be able to obtain loans at favourable conditions, whereby they shall be required to provide only 10% (or less) of the value of an eligible loan as security.
The guarantee may only be used to support a new loan and may not be used to support overdrafts or other revolving credit facilities.
Eligible costs include the investments in acquiring tangible assets such as machinery and equipment; fittings, fixtures, refurbishment and restoration of commercial properties; investments leading to significant growth or to the development of a new market; immoveable property linked to a business development project; as well as working capital linked to such investments.
The loan may be issued by any of the participating banks that shall apply conventional lending criteria but are not committed to lend on the basis of the Letter of Intent issued by Malta Enterprise.
If the bank agrees to issue the loan, the bank will inform Malta Enterprise that the project was deemed to be commercially feasible and that a loan in favour of the beneficiary is being issued.
Malta Enterprise will not require security directly from the beneficiary. The Corporation will, however, require that beneficiaries pay an annual premium of 2% over the value outstanding at the end of each calendar year.
To date, Bank of Valletta, Banif Bank and Lombard Bank have confirmed their participation in the scheme, though other banks may still be added to the list of participating banks.
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