CZECH EXPERTS

Accommodation operators will be able to draw loans from COVID plus

Operators of accommodation facilities affected by the coronavirus pandemic, in which the share of annual revenues from the provision of services to foreigners in the last accounting period reached at least one fifth, will be newly included in the COVID plus guarantee program.

This was stated by the Minister of Industry and Trade Karel Havlíček (for YES) at a press conference after its meeting.

Loans in COVID plus are guaranteed by the state through the Export Guarantee and Insurance Company (EGAP). According to spokesman Jan Černý, EGAP is ready for a change in the program. According to the Ministry of Industry and Trade (MIT), which prepared a proposal to expand the program, the accommodation sector was particularly severely affected by government anti-epidemic measures. The aim of the proposal is to support liquidity in the field, preserve jobs and operation of facilities, maintain the offer of existing services and support the development of the business sector. This follows from government materials available to ČTK.

“We are counting on changes in the conditions of the COVID plus program and we are ready for them,”

– its spokesman Jan Černý told ČTK on behalf of EGAP.

According to him, requests for guarantees, as well as demands for ordinary insurance, are handled contactlessly, electronically. According to a tour data report by the state agency Czech Tourism, approximately 2.7 million tourists stayed in collective accommodation establishments in the Czech Republic in the first to third quarters of last year, a year-on-year decline of 68 percent. According to the president of the Association of Hotels and Restaurants of the Czech Republic, Václav Stárek, a longer recovery is expected in facilities dependent on foreign guests. According to him, tourism could reach the level of 2019 in 2023. The provision of guarantees through EGAP was made possible by an amendment to the law of last April.

The program is designed for export-oriented companies with more than 250 employees. Through commercial banks, they can apply for loans from five million to two billion crowns. The maximum loan amount corresponds to 25 percent of the company’s annual turnover. EGAP now guarantees up to 90 percent of the principal, guarantees are provided for six years, both for operating and investment loans. Compared to the original wording, COVID plus was already extended in the middle of last year by companies from transport and tourism.

It can no longer be used by gambling companies. The program is expected to run at least until the end of June. According to the Czech National Bank, companies drew 8.1 billion crowns from the program as of 31 December. As of the same date, banks approved 66 applications for CZK 9.5 billion, and received 91 applications for CZK 13.5 billion.

Source: cjeurope.com

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