Flemish Covid-19 loans for businesses return as 'Ukraine loans'

Flemish Covid-19 loans for businesses return as 'Ukraine loans'
Flemish Minister of Employment, Economy, Social Economy and agriculture Jo Brouns Credit: Belga/JAMES ARTHUR GEKIERE

During the Covid-19 pandemic, businesses suffering the consequences of this could obtain a loan from the Flemish government. The same scheme has now been re-introduced in light of the war in Ukraine, which is heavily impacting many companies.

Since 28 February of this year, bridging loans at low-interest rates were offered to SMEs that were negatively affected by the pandemic. The same system is now being rolled out as a result of the war, Flemish Minister of Economy Jo Brouns said in a press release.

"Employers and employees have strongly felt the heavy impact of the pandemic. Just as the social and economic fabric was recovering, many businesses were put under pressure by a new challenge: the war in Ukraine," he stated.

"With the bridging loan, we already had a strong vehicle to easily support businesses. We can switch smoothly to continue to offer this support to companies and entrepreneurs who are now hampered by the war in Ukraine."

Uncertain times

The scheme is intended to give liquidity to help companies in the region continue to pay their bills and maintain their investments "in these uncertain times." The interest rates for these loans are set at 1.5%, while the pandemic loans' interest rates sit at 1%.

The war in Ukraine is largely impacting many businesses through the escalating supply chain issues that have resulted from the conflict. However, the war itself has also further driven the rise in energy and food prices, further negatively affecting the landscape they are operating in, as well as rising labour costs.

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The available budget as part of the pandemic bridging loan scheme was doubled to €200 million euros and the region has now notified the European Commission that it will be extended until 15 December. Since the end of February, 815 applications worth €81.5 million have already been approved.

To apply for the reformed scheme, SMEs must be able to show that there is a link between the loan and the war in Ukraine, such as the sharp increase in energy costs. Companies can apply for the loans in light of the pandemic until 15 June 2022.

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