The Brazilian government together with the Central Bank have announced this afternoon (27/03/20) the following financial measures to assist small and mid-sized companies going through the current coronavirus crisis:
• R$ 40 billion of emergency line of financing to finance 2 months of payroll, which will be eligible for companies with annual sales ranging from R$ 360,000 to R$ 10,000,000;
• 85% of the financing will be provided by the government while 15% by commercial banks;
• Likewise, the government will assume 85% of the default risk and the banks 15%;
• The amount of financing received by the company is limited to twice the amount of the national minimum salary per employee. The amounts will be deposited directly in the employee’s bank account (but the contracted debt is assumed by the company);
• The company applying for the financing will be obliged to maintain jobs for the 2 months program period;
• Th authorities expect that such measure has the potential to assist over 12 million of employees and 1.4 million of companies;
• The amount will be financed at the Interbank Deposit Certificate rate (CDI), which is currently set at 3.75% per year and for a term of 30 months plus a grace period of 6 months (36 months overall).