Bridging the COVID-19 Liquidity Gap: Danish State Guarantee Schemes for Loans and Credit Facilities to Large Companies and SMEs
The outbreak of COVID-19 has had a dramatic impact on the operations of many Danish businesses across several industries. For businesses facing low or even no activity at all, the COVID-19 outbreak will naturally lead to a liquidity shortage and new debt financing may be required to bridge this COVID-19 liquidity gap.
(17 April 2020 - Updated on 20 July 2020)
The Danish Government has, via the Danish State's investment fund, Vækstfonden, established two new guarantee schemes for loans and credit facilities to Danish companies, whose revenue has severely deteriorated due to the COVID-19 outbreak.
The guarantee schemes were first introduced in March 2020 and have since then been subject to various amendments; most recently, the guarantee coverage has been increased from 70% to 80% of the principal amount of the loan or credit facility and the deadline regarding application for a state guarantee has further been extended from 15 October 2020 until 15 December 2020.
This Insight provides an overview of the two guarantee schemes, including a review of:
- the conditions that must be satisfied to obtain a state guarantee, including company requirements,
- the coverage provided by a state guarantee,
- the guarantee fees payable to Vækstfonden and
- the application process to obtain a state guarantee
Further, this Insight highlights some of the issues that may potentially arise in connection with the practical application of the new guarantee schemes.
Click here to read "Bridging the COVID-19 Liquidity Gap - Danish State Guarantee Schemes"
(Updated on 20 July 2020)