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Second Company Financial Support Line

Last updated on 23rd August 2020

This week the Regional Government (RG) approved during the government plenary session a resolution that will create a second line of support to companies in the region, totalling 20 million euros. It is believed that by setting up a second line of support, the RG will be able to assist regional companies while they get back on their feet, thus keeping as many people as possible employed.

This second line of support for the regional business was already being prepared by the Regional Secretary of Economy, Rui Barreto, in conjunction with the Portuguese Minister of the Economy, Pedro Siza Vieira.  Rui Barreto confirmed that that “this credit line as set up to overcome the constraint of the ‘de minimis rule’, imposed by the European Commission, which limited State Aid to companies up to 200 thousand euros, therefore discriminating against larger companies. This ruling has now been overturned due to the efforts of Pedro Siza Vieira and his ministry.

At the end of June the European Commission (EC) approved the  Portuguese support scheme for companies affected by the pandemic in the Autonomous Region of Madeira. The objective of the regime is to provide liquidity to companies affected by the pandemic, thus allowing them to continue their activities, initiate investments, prop up their finances and maintain jobs. The EC authorised, a set sum for the region to set up a 20 million euro line of support aimed at small, medium and large companies. Which will now allow companies to receive a maximum of €800,000 in state approved aid.

Once all legal procedures have been completed, the next step will be the signing of the Protocol between the Instituto de Desenvolvimento Empresarial da RAM (IDE), the line’s managing entity, and SGM – Sociedade de Garantía Mutual. This document will define the characteristics of the support, as well as the access conditions.

For now, the main differences between this fund and the Investe RAM, is that this second line, APOIAR Madeira 2020, companies will not be required, neither by the Banking Institutions nor by SGM, any type of personal or patrimonial guarantees. On the other hand, all companies, whether small, medium or large, may obtain financing up to the limit of 800 thousand euros, that is, the financing is not conditioned to the size of the company.

The remaining conditions are in all similar to those of the Investe RAM line. As in the 100 million line, the loan amount can be converted into a lost fund if companies prove a 40% drop in turnover between the months of March and May, in Madeira, and 15% for companies based in Porto Santo. In order to convert the amount of financing into a non-refundable amount, companies will still have to prove that the permanent jobs are maintained at the end of the 18-month grace period.

Rui Barreto emphasised the effort and commitment that the Regional Government has been making in seeking solutions and in supporting Madeira’s business people, entrepreneurs and workers, saying “We wanted to create a solution that suits the reality of the region, despite the constraints, and this we believe, will meet the needs of Madeira’s business sector.”

Applications may be submitted until the 31st of December, 2020 and the loan period will last for 5 years. All interest payments will be borne by the beneficiary.

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