BMD concludes agreement with BOV on small loan guarantee program
Bank of Valletta is the first bank to join the Development Bank of Malta’s Small Loan Guarantee Program, a mechanism designed to support small businesses seeking access to finance.
In a statement, BMD said it expected a number of other commercial banks to follow suit.
The SLGS seeks to support small businesses in providing access to credit facilities up to â¬ 250,000 for working capital. It has been specially designed to overcome one of the main obstacles to financing start-ups and SMEs: high collateral requirements.
In light of this, the program allows small businesses to take out loans under BMD’s Covid-19 guarantee program without the need to provide high personal guarantees. BMD provides additional protection to banks, which in turn reduce collateral requirements to a maximum of 20% of the loan value.
The scheme will apply retroactively: if an eligible company has already entered into loans with a participating bank, it can renegotiate the guarantee previously deposited under the SLGS.
Since the launch of the Covid-19 guarantee program, the MDB has supported more than 400 companies with loan facilities reaching more than 285 million euros.
âWe are very happy with the use of aid related to Covid-19 so far; through the additional incentives offered to smaller businesses and self-employed people, we are ensuring that the Bank can truly reach and help every entrepreneur, regardless of the size of the business, to play a role in the economic regeneration of Malta â, said the president of the MDB. Josef Bonnici maintained.
He stressed that the funds available for the guarantee scheme were far from being exhausted.
âWe must strive to continue to reach out and support local businesses. To this end, we encourage local entrepreneurs to contact their favorite commercial banks, ask for help and find out more about these attractive programs, âBonnici concluded.