“At the NRB, we are working hard to develop two programmes that will help small and medium-sized businesses in the affected localities to deal with the effects of the floods and to overcome the problems the floods have caused them. Currently, together with the Ministry of Industry and Trade, we are setting the specific conditions and parameters of the programmes,” said Michal Nebeský, NRB Board member responsible for trade.
“We have been communicating with representatives of the business community since the first day of the floods, when it was clear that this segment would be assessing a huge damage in the affected areas. Both the National Development Bank’s programmes, i.e. both the guarantee and the preferential loan option, are aimed at helping these SMEs to tide over the worst of the period. The MoF has also decided, while the flood situation is still ongoing, to provide relief for affected businesses in tax obligations, for example, administrative fees will be waived in the case of individual applications for repayment schedules, and they will not face any penalties for late VAT or control declaration. Another form of assistance for entrepreneurs was launched by the government this week, when the Ministry of Labour and Social Affairs announced the Flood 2024 programme, which will compensate wage costs for companies whose employees were unable to do their jobs because of the floods “, said Finance Minister Zbyněk Stanjura, who heads a working group on flood damage.
“Entrepreneurs in flooded locations face extensive damage to their property and our goal is to help them effectively rebuild their businesses. That’s why we have developed a preferential loan programme to enable them to recover from the effects of this natural disaster. It will be possible to draw on investment needs i.e. the restoration of production facilities, repairs or construction of infrastructure, investment in new technologies or modernisation of production processes,” says Minister of Industry and Trade Jozef Síkela, adding that the aid will be financed from the Operational Programme Technology and Applications for Competitiveness (OP TAC) with an allocation of CZK 1.5 billion (EUR 60m), which the Ministry is ready to increase if necessary.
Interest-free loan with possible repayments writing off
Entrepreneurs will be able to use interest-free loans from the financial instrument Expansion – Loans (OP TAC) to rebuild their businesses after the flood. NRB will provide loans ranging from CZK 0.5 million to CZK 100 million (EUR 20k-4m). The support can be used for investment needs. The loan will be granted for up to 90% of eligible project expenditure, with a repayment period of up to 15 years. The grace period can reach up to 12 months after the completion of the project. In addition, it will be possible to obtain a financial contribution (grant component) of up to 25 % of the loan principal, in the form of repayments writing-off (after completion of the project). The total allocation for this programme is approximately CZK 1.5 billion (EUR 60m). State aid regime: De minimis and possibly using GBER Articles 14 and 22.
Commercial loan guarantees
As part of the renewal of the national scheme GUARANTEE, the NRB will also offer guarantees of loans provided by cooperating commercial banks, with the allocated capacity of up to CZK 3.5 billion (EUR 140m). “We are currently negotiating it with the Czech Banking Association. I believe that banks in the Czech Republic will do their best to assist their clients affected by the floods,” adds Michal Nebeský, the NRB Board member.
“We welcome this support and believe that the administration of applications will be simple and fast for the affected companies. This is crucial for any assistance,” says Josef Jaroš, Chairman of the Board of Directors of the Association of Small and Medium-sized Enterprises and Crafts of the Czech Republic.
