These are extraordinary times especially so for businesses. Decisions and financing are needed to ensure survival in the short term, but COVID-19 could also be the jump-start for businesses to do things differently in the medium- to long-term.
Financing working capital requirements and shortfall in cashflow of SMEs and Large Enterprises through the ‘BOV-MDB COVID Assist’ was the theme of a webinar organised by the Malta Chamber of SMEs in collaboration with Bank of Valletta and the Malta Development Bank (MDB).
“We understand the pressure that most businesses are in and we will do whatever we can to help SMEs revive once again. We will not be going back to the pre-COVID era, so we must adapt fast to this new reality. We need to take decisions and implement changes without wasting time so that businesses will remain viable in the future,” said Abigail Mamo CEO of the Malta Chamber of SMEs in her opening address.
Albert Frendo, BOV chief credit officer explained the features of the BOV-MDB COVID Assist and how businesses can access the necessary funds to help them through these difficult times.
“When the paradigm shifts, as it has done now, it can provide businesses with a huge opportunity to reassess their business models and their cost activities. It is only after a thorough assessment to eliminate value-destroying activities that one should actively consider additional borrowing. Debt containment is key. Now more than ever is not the time to over or under borrow and one has to be cognizant of the fact that what is borrowed today, needs to be repaid from the profit margins of tomorrow. Businesses will encounter pain and bruises in the months to come but good times will return as well.”
The BOV MDB COVID-19 Assist benefits from the support of the MDB COVID-19 guarantee scheme launched by the Malta Development Bank through the provision of a bank guarantee for €350,000,000, covered by a government guarantee issued by the Ministry of Finance
“Since the launch of the guarantee scheme, as Malta Development Bank, we continued to enhance this scheme. We listened to businesses who were feeling constrained with the specified maximum loan amounts and we renegotiated an increase in maximum loan amounts of up to €10 million for SMEs and up to €25 million for large enterprises. The MDB is doing its utmost to ensure that, through the intermediation of the accredited banks, the Guarantee Scheme will provide as much liquidity as possible to businesses and at the lowest borrowing cost possible,” said MDB chairman Prof. Josef Bonnici.
The BOV-MDB COVID Assist is a financing scheme aimed at assisting local SMEs and large enterprises facing unprecedented disruptions. It will enable them to meet working capital requirements, aiding them with running costs such as employees’ wages and salaries, bills, pending invoices, acquisition of stock, maintenance costs and expenses that are critical for the smooth running of the business.
Interest rates start from a fixed rate of 2.5 per cent for the first two years, exclusive of guarantee fees, with all other bank charges being waived. Repayment terms can range between 18 and 72 months, with an inclusive moratorium period of six to 12 months.
“Once again, Bank of Valletta is supporting the local business community by providing much needed liquidity and working capital facilities. Together we will ensure that liquidity flows into the market so the economy will regenerate itself and our local businesses will thrive once again,” concluded Frendo.
Businesses seeking to avail themselves of the BOV-MDB COVID Assist are to send an email to smefinance@bov.com or, if they are BOV customers to their relationship manager, business centre or corporate centre. More information on https://www.bov.com/content/bov-mdb-covid19-assist.