Factsheet for measure
LV-2020-13/686
–
Updated
– measures in Latvia
ALTUM Loan Holidays Guarantee
ALTUM Kredītu brīvdienu garantija
Background information
In cooperation with the Ministry of Economics, the state owned development finance institution ALTUM has prepared assistance measures for companies affected by crisis due to spread of COVID-19 pandemic.
For companies that have experienced objective difficulties in making loan repayments to banks due to the COVID-19 crisis, ALTUM offers a credit guarantee that will allow the bank to defer payment of the principal amount.
ALTUM is a state-owned development finance institution, which offers state aid for various target groups with the help of financial tools (such as loans, credit guarantees, investing in venture capital funds, etc.). ALTUM develops and implements state aid programmes to compensate for the market's shortcomings that can't be solved by private financial institutions.
The law “On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19” (adopted on 20 March 2020, valid from 22 March 2020) and Regulations of Cabinet Nr. 122 Regarding the Increase of the Reserve Capital provides funding for the measure. Cabinet Regulation No. 150 Regulations Regarding Guarantees for the Enterprises whose Activity has been Affected by the Spread of COVID-19 (adopted on 19 March 2020) regulates the measure.
Content of measure
Credit guarantee is available to businesses, farmers, and those working in the fisheries and aquaculture industries regardless their size.
The amount of the financial service covered by the guarantee shall not exceed 25% of the business’ total turnover in 2019, but the maximum amount of the guarantee shall not exceed €5 million.
The guarantee covers up to 50% of the amount of the financial service (at the moment the guarantee is granted). Term of the guarantee is up to 6 years for financial leasing and investment loans, and up to 3 years for working capital financial services. Guarantee premium is 0.5% per year.
Updates
The following updates to this measure have been made after it came into effect.
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13 May 2021
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The regulations has been amended on 13 May 2021. It is stated that ALTUM will provide guarantees until the deadline for the provision of aid specified in Section 3.2 "Aid in the form of guarantees on loans" of the Temporary Framework, which currently is 31 December 2021.
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01 December 2020
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The measure is extended till 30 June 2021.
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17 July 2020
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The state of emergency declared in Latvia on 13 March as a result of the global COVID-19 pandemic came to an end at 10 June 2020. Therefore, the law 'On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19' is no longer in force.
Instead, the 'Law on the Suppression of Consequences of the Spread of COVID-19 Infection' was adopted on 6 June 2020 (in force from 10 June 2020).
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17 July 2020
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An express guarantee has been introduced – up to €500,000 and up to 50% of sum. This measure is available in short term – just few days. The guarantee can be used for existing loans for investments and financial leasing, financial leasing limits or for new loans to finance working capital, including credit limits (credit lines and overdrafts).
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Use of measure
In the period from 25 March 2020 to 10 June 2020, ALTUM has provided guarantees in total amount of €82 million.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Applies to all businesses
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Does not apply to citizens
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Actors and funding
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Actors
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Funding
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National government
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Consulted
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Consulted
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Form
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Direct consultation outside a formal body
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Direct consultation outside a formal body
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Unknown
Involvement
Top level social partner organisations – the Latvian Employers’ confederation and the Free Trade Union Confederation of Latvia – on 17 March 2020 has published “Statement on support for government action to limit the spread of Covid-19 and reduce the impact of the crisis on Latvian companies and workers”. The social partners emphasized the need for cooperation of government, businesses, workers and citizens to ensure that everything we do helps to address this crisis.
Views and reactions
As far as we know social partners participate in discussions on measures for the prevention and suppression the spread of COVID-19 and on crisis impact on economy. However specific opinions of social partners are not published.
Sources
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25 March 2020: Regulations of Cabinet Nr 122 Regarding the Increase of the Reserve Capital
(likumi.lv)
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25 March 2020: Covid-19 skartie uzņēmēji var pieteikties ALTUM atbalsta programmām
(www.altum.lv)
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09 April 2020: Law On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19
(likumi.lv)
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16 April 2020: ALTUM Loan Holidays Guarantee
(www.altum.lv)
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16 April 2020: Cabinet Regulation No. 150 Regulations Regarding Guarantees for the Enterprises whose Activity has been Affected by the Spread of COVID-19 Regulation No. 150 Adopted 19 March 2020 Regulations Regarding Guarantees for the Enterprises whose Activity has been Affected by the Spread of COVID-19
(likumi.lv)
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10 June 2020: Law on the Suppression of Consequences of the Spread of COVID-19 Infection
(likumi.lv)
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10 June 2020: ALTUM atbalsts krīzes skartiem uzņēmumiem būs pieejams arī turpmāk; krīzes laikā veicināta 264 miljonu eiro ieplūšana tautsaimniecībā
(www.altum.lv)
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01 December 2020: ALTUM programs to overcome the impact of Covid-19 will be available to entrepreneurs next year as well
(www.altum.lv)
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30 June 2021: Regulations Regarding Guarantees for the Enterprises whose Activity has been Affected by the Spread of COVID-19 (30 June 2021)
(likumi.lv)
