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This Wednesday the president Sebastian Pinhera announced new financial assistance measures in the face of coronavirus. This time, the benefits of the Emergency Plan are aimed at independent workers and companies; and they are decorated in a law called “Kovid-19 Bond”.
“The plan has two big priorities: to benefit vulnerable groups, 2.6 million informal workers in our country who do not have access to unemployment insurance ”Details President.
The second priority, he added, are small and medium-sized companies (SMEs).
“A coronavirus pandemic threatens not only the health of many compatriots and the lives of people at high risk (…). It also affects the incomes and jobs of many Chileans and jeopardizes the survival of many micro, small and medium-sized companies, ”Pinier explained in his initial speech.
He added: “Today we are announcing the second phase of this contingency plan, which complements the measures taken by the Central Bank for strengthen liquidity in the financial market and the Financial Market Commission to make rules that will allow companies to improve access to credit, more flexible. “
Pinhera reiterated that the world and Chile are facing “the greatest challenge and threat in the last 100 years. (…) We are fully aware of the fears, worries and insecurities that affect Chilean families because of this pandemic. ”
Honorary Workers
The first focus of this new plan is to protect families through $ 2 billion fund creation provide great benefits; and create more jobs for the most vulnerable people and families.
It will be especially useful. 2.6 million informal workers without an employment contract and who today have no protection against unemployment.
“(…) We are working on a permanent system of protection for independent workers issuing honorary tickets in the face of catastrophic situations, for example, caused by the coronavirus pandemic,” he said.
The structure of this fund is flexible, “in order to maximize our focus on delivering bonds and gradually create extraordinary jobs,” the government added in a minute.
Entrepreneurs and SMEs
The second direction is “to help our entrepreneurs, SMEs and entrepreneurs who need it, through financing with state guarantees,” the president said.
This new line of credit with a state guarantee will limit the extraordinary credit risk posed by extraordinary and will ease the conditions for working capital loans to banks companies for up to 48 months, with a grace period of up to 6 months and an equivalent amount of up to 3 months of sale.
“This line will be available until September 30 of this year and will allow financing loans for companies in the amount of up to 24 billion US dollars, which is equivalent to about 20 times more than currently available lines,” the head of state explained.
Banks interested in participating in this program should provide these Covid-19 credit lines for new working capital with simple, massive, accelerated and preferential rates for customers who request this and who meet certain requirements.
Benefits in Banks
On the other hand, banks that provide these resources to state-guaranteed beneficiary companies should transfer all previously existing loans of the beneficiary-debtor and postpone all depreciation of their old loans until new loans are fully repaid.
“These measures help companies in need and protect the guarantees provided by the state,” said President Pinhera.
The guarantee that the state will provide will depend on the size of the beneficiary company. For companies with sales of less than 25 thousand UV per year, the state guarantee can reach up to 85% of a new loan for working capital.
This guarantee will be up to 70% for companies with sales from 25,000 to 100,000 UV per year and up to 60% for companies with sales over 100,000 and less than 1 million UV per year.
Beneficiary companies, the President noted, should use these resources to operating and working capital needs, including, but not limited to, remuneration, rent, suppliers, tax liabilities and other needs to have your companies work during an emergency; and resume normal work after the crisis.
“Beneficiary companies will not be able to use these funds to amortize previous loans to banks, pay dividends or withdraw capital, or provide loans to related third parties or other non-essential areas,” said Pinhera.
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