Source: Government of Sweden
On September 24 the Government decided to extend until the end of the year the government credit guarantee programme aimed at supporting small and medium-sized enterprises that have experienced financial difficulties due to the COVID-19 pandemic. The programme was launched in the spring as part of the Government’s measures to support the business sector during the ongoing pandemic and builds on an agreement between the government parties, the Centre Party and the Liberal Party. As a result of this decision, the option for businesses to take part in the credit guarantee programme applies to loans granted until 31 December 2020.
On 26 March, the Government instructed the Swedish National Debt Office to take preparatory measures and implement a government credit guarantee programme. Credit guarantees totalling a maximum of SEK 100 billion may be issued to credit institutes that operate in Sweden for loans primarily to small and medium-sized enterprises that have experienced financial difficulties due to the COVID-19 pandemic, but that are otherwise considered viable. The programme is a way to enable a temporary extension of loan provision to businesses, which will help their liquidity. Central government sharing the credit risk with the banks can make it easier for businesses to obtain loans.
The guarantees for loans taken within the programme are valid for up to three years. Central government bears 70 per cent of the risk of loans. Until 11 September, SEK 2.24 billion in credit had been guaranteed within the programme, spread across 615 loans.