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Of the direct support of 185 billion against the effects of the pandemic, 164 billion are destined in various ways for the business sector (see graph). The latter alone is a little more than triple what the state is expected to invest in the entire judicial system in 2020.
Strong pressure on the Growth Agency
Short-term leave means that the state takes most of the bill when employees work 1-4 days with most of their earnings intact. The system applies to all industries and, in theory, comprises almost 2 million Swedes.
Even on Thursday, the Swedish Growth Agency had awarded SEK 20.6 billion to more than 45,000 companies, with a total of more than 400,000 employees. Application pressure continues to be high, as the debate continues.
Great desire for affordable bridge loans
State Almi Corporate Partners is working to provide loans and advice to new and established companies that want to grow. Almi received SEK 3 billion to help “sustainable companies” with bridge loans overcome the pandemic.
– It was a storm, and it continues. Normally we make 3,300 of our regular loans in one year, we have now arranged a little more than 1,100 loans in one month. About 600 of them are new bridge loans, says Sara Brandt, deputy chief executive of Almi Företagspartner.
Mortgage loans are designed to strengthen the liquidity of companies, with the interest rate being a maximum of 4.95 percent. The maturity is one year, and then you can postpone interest and amortization.
Until Thursday inclusive, almost 2,400 SMEs had applied for bridge loans. About 500 million have been paid, but approximately one in four companies has not.
– We are doing a comprehensive review of what your economy was like last year. The support will go to healthy companies, which would have been successful if the crown crisis had not come.
No patient threat to the corporate doctor
The new corporate act means that the state guarantees new loans that banks make to companies that have been negatively affected by the crown pandemic.
It is the Debt Office that manages the support, which means that the state guarantees 70 percent of the loans with a maximum of 75 million per company, the rest of the risk is borne by the lender. By May 6, 65 credit institutions had joined, including the top four Swedish banks.
The National Debt Office can provide guarantees totaling SEK 100 billion, but so far it has set aside SEK 39 billion based on last year’s loans to small and medium-sized businesses, the main target group.
But after just under a month, the affiliated banks had made loans of only SEK 352 million with the government guarantee behind them.
– It takes time for banks to get started on their routines, and companies are probably considering other support measures as well before increasing their loans. It will be several more weeks before it is possible to assess what the asset will look like, says Malin Hasselblad Wennström, a communicator with the Swedish National Debt Office.
Air support has not really been lifted
The world’s flights are grounded and a specific credit guarantee against the Swedish industry came in March. But only this week, the first guarantee was issued, after the forms were sworn in before the European Commission. SAS now receives a loan guarantee of 1.5 billion from the Swedish and Danish states.
The guarantee covers 90 percent of the loans that airlines can obtain, which must be approved for commercial traffic. Out of a total of 5 billion, there are now 3.5 billion.
The National Debt Office, which issues the guarantee, states that 16 companies have expressed interest in credit support, but that only a few meet the formal requirements. So far, only one formal request has been received from SAS.
Ready money should make conversion easy
The latest package from the government and associated parties is a cash subsidy of up to SEK 39 billion. It must compensate for lost sales and facilitate, for example, a workshop company that begins manufacturing medical supplies.
Companies receive support for March and April 2020, the loss of sales is calculated compared to the same period last year. The compensation may be a maximum of SEK 150 million per company. The proposal is slated to take effect on July 1, which will be administered by the Swedish Tax Agency, but must first be approved by the European Commission. The government estimates that up to 180,000 companies may be eligible for aid.
23,000 companies have been deferred with taxes and fees
In addition to generally reduced employer contributions during the April-June period, companies can also be allowed to pay the majority of employer contributions and wait for VAT and provisional tax payments to be paid.
By Friday, the Swedish Tax Agency had made more than 51,000 decisions that affected more than 23,000 taxable companies. The total sum on Friday was up to SEK 29 billion, but it is growing day by day.
The export industry pursues financing …
Swedish export companies pursue financing like never before.
Swedish export credit SEK has seen a sharp increase in its new business loans; from SEK 13.3 billion in new loans during the first quarter of last year to SEK 33.3 billion for the corresponding period this year.
At the beginning of the crisis, it was mainly medium-sized companies, as well as subcontractors from large companies, who wanted to borrow. But today there are also large companies, which often use corporate bonds.
– When that market doesn’t work, they need to make sure they have a different type of financing, says Catrin Fransson, CEO of SEK, who expects the increase to continue during the second quarter.
… and guarantees
In addition to financing, exporting companies often need collateral to carry out transactions that are still lost. These can be obtained from the Export Credit Committee (EKN), which insures the credit risks of companies in export transactions.
The most important crisis support is business credit guarantees: guarantees for, for example, mortgage loans. There are already applications for a total of SEK 170 billion, almost double that of the entire financial crisis.
In normal cases, they are only companies with a turnover of less than SEK 5 billion, which can receive the support that normally covers 50 percent of the bank’s risk, now this increases to 80 percent. During a crisis, large companies can also receive support, with risk coverage of 75 percent:
“We have a record interest from major export companies in terms of operational credit guarantees,” says EKN CEO Anna-Karin Jatko.
Rent discount – please be good
Stores and restaurants are among the companies that often rent their premises and have called out after getting a rental discount. This is happening now when the government has decided that the owner can receive a 50 percent discount on the refund, but can only apply for the support after the end of the six months.
The industrial organization Real Estate Owners has a standardized agreement used by many, but not all, owners. By Friday, some 5,000 contracts had been concluded.
The owner’s CEO, Reinhold Lennebo, says that all of the large companies he speaks with work on leases.
– When the mists dispersed on how this would apply, it accelerated. Most homeowners sign such agreements with their tenants, he says.
