GRTU takes credit for Micro Guarantee implementation

The Chamber of SMEs has expressed great satisfaction at the implementation of the Micro Guarantee scheme by government, which enters into effect on August 1, 2012.

The scheme accelerates growth by facilitating access to debt finance for small business undertakings.

The Micro Guarantee was GRTU's major proposal for the last budget. Together with Micro Invest (Tax Credits), Micro Credit (JEREMIE), the employment support schemes of ETC, most importantly the Employment Aid programme (EAP) and the Training Aid Framework (TAF) and the other Malta Enterprise support schemes such as the Quality , Interest Rate Subsidy Scheme, Create, Business Advisory Service and Trade Promotion, micro, small and medium sized enterprises in Malta have an excellent package.

"This package gives them great access to finance to enable them to start business, grow and innovate and create profit for themselves and jobs for many workers. GRTU is proud that we were instrumental in pressurising government to successfully find the millions necessary to finance all this unique support package," the GRTU said.

The Micro Guarantee may be used to support a new loan, required to finance eligible costs approved by Malta Enterprise with the loan amount not exceeding €100,000. Beneficiaries of the scheme will be able to obtain loans at favourable conditions, whereby they shall be required to provide only 10% (or less) of the value of an eligible loan as security and the guarantee shall relate to new banking facilities. The loans guaranteed under the scheme may not exceed a 10 year period and the interest rate on all facilities shall be in accordance with the policies of the bank issuing the loan. Unlike the Micro Credit scheme the Micro Guarantee scheme can be applied to loans from any bank.

To be eligible an enterprise can be a self-employed person but cannot exceed 20 employees (full time equivalent). Eligible expenditures are investments in acquiring tangible assets defined as: machinery, equipment, fittings, fixtures, refurbishment and restoration of commercial properties, investments leading to significant growth or to development of a new market or instruments required to commerce or to enhance business operations.

The Micro Guarantee can however also be used for working capital linked to the above mentioned tangible assets provided that the users are either start-ups (established for a maximum of 3 years) with the total value of working capital not exceeding 30%, enterprises under certain conditions, and the costs would be incurred within a period of 6 months from the date of the first drawdown.

Acquisition not directly related to the trade and business of the applicant are not eligible costs, as are any costs that are assisted through other incentive measures cannot be assisted also under the Micro Guarantee scheme.