New business relief packages to pave the way for more loans to SMEs affected by the crisis
In October, the Danish Government and a wide majority of parties represented in Parliament reached agreement on new relief packages for Danish businesses. The agreement improves and extends several of EKF's existing schemes.
The new trade and industry relief packages established by the Danish Government and the parties to the agreement strengthen EKF's capacity for making guarantees for small and medium-sized Danish export businesses. Since spring, EKF has been able to cover 80% of the banks' risk on new loans to SMEs who have experienced or expect to experience loss of revenue as a result of the COVID-19 crisis.
Under the new agreement, EKF will now instead be able to cover 90% of potential losses by banks on new loans to SMEs. The aim is to make lending less risky for the banks and pave the way for more financing solutions for businesses disrupted by the COVID-19 crisis. At the same time, the scheme will be extended so that eligible SMEs can apply to their bank with a guarantee from EKF until 31 January 2021.
"With the prospect of further disruption in our major export markets this autumn and winter, we must reregrettably acknowledge that the dark clouds are likely to remain looming over Denmark's export businesses for a while yet. But under the new agreement, we will hopefully be able to help more Danish exporters to come out of this intact. I would therefore like to impress upon Danish exporters that EKF is ready to do all in its power to assist them," said Kirstine Damkjær, EKF's CEO.
The government guarantee facility, which serves as a lifeline for the companies using the private trade credit insurance market, will also be extended. The facility will now be in force until 30 June 2021 and will enable trade credit insurers to maintain their capacity in the market during a time of heavily increased B2B trade risk exposure. The guarantee facility is available for both national and international trade.
NOTE: We expect the executive orders and EU approval enabling these relief measures to be issued shortly. Once they do, the increased percentage of cover and extensions will come into force.