COVID - 19 - Constitution of the specific allocation fund for the granting of guarantees to facilitate access to credit for Micro, Small and Medium-size Enterprises
Constitution of the specific allocation fund for the granting of guarantees to facilitate access to credit for Micro, Small and Medium-size Enterprises
Pursuant to Decree No. 326/2020, published in the Official Gazette on March 31, 2020, the Enforcement Authority (Ministry of Productive Development) and the Administration Committee of the Argentine Guarantee Fund (“FoGAr”) were instructed to set up a specific allocation fund (in the amount of AR$30 thousand million) in order to grant guarantees to facilitate access to loans for working capital by Micro, Small and Medium-size Enterprises (“MiPyMES”) registered in the MiPyMES Business Register, in accordance with the following guidelines:
(i) Recipients of guarantees: financial entities authorized by the Central Bank of the Argentine Republic and non-financial entities that develop financing tools, and in support of those issued by mutual guarantee companies, and National, Provincial, and Regional funds or of the City of Buenos Aires, constituted by the respective governments.
(ii) Purpose of the guarantees: to guarantee the payment of the loans for working capital, including payments of wages, payments and contributions to social security, and coverage of deferred checks granted by the entities mentioned to the beneficiaries referred to in the following item.
(iii) Beneficiaries: MiPyMES registered in the MiPyMES Business Register set forth in Law No. 24,467, with a MiPyME Certificate in force.
1. The guarantees may cover up to 100% of the loan taken by the MiPyMES.
2. The FoGAr may grant guarantees up to the amount of the specific allocation fund, without requiring counter-guarantees from the company taking the loan.
3. The Enforcement Authority and the FoGAr Administration Committee, each in its orbit, will define the requirements in each case, as well as the financing lines eligible for the guarantees to be granted.
4. The Enforcement Authority may modify and/or expand the number of beneficiaries of the loans and/or the destination of the loans.
The regulation came into effect on March 31, 2020, and will remain in force for the duration of the emergency established by Law No. 27,541 and its eventual extensions.