Banks: ABI, an agreement on funding aimed at bolstering SMEs was signed
Milan, 3 August 2009
ABI and other members of the Bank-Enterprise Task Force signed a Joint Advice in Milan in the presence of
Italian Minister Giulio Tremonti; the Advice aims to suspend mortgage payments
ABI and other members of the Bank-Enterprise Task Force signed a joint advice today in Milan.
The parties agreed that measures must be taken in order to favor small and medium-sized businesses that temporarily find themselves in distress due to the recent financial crisis.
Specifically, they agreed to: suspend the payment of the amount of principal due by SMEs to banks with which they have a mortgage; and take measures aimed at improving the capitalization of companies.
Specifically, the Joint Advice sets out the following measures:
- suspend for 12 months mortgage payments (with respect to the amount of principal due);
- suspend for 12 or 6 months “immovable” and “movable” property lease payments, respectively
(with respect to the amount of principal due);
- extend short-term loan due dates by 270 days, to help companies meet their liquidity
requirements with respect to advances on receivables;
- help small and medium-sized businesses increase their capital, by making specific funding
available or by taking other measures aimed at supporting companies that increase their capital.
Specifically, the Advice sets out that:
- companies having medium and long-term bank loans (mortgages) and financial leases when the
Advice was signed are eligible to apply for payment suspension. Installments must be due in, or
not overdue by more than, 180 days after the day the application was submitted (and must have
not yet or only partially been paid);
- the following companies are eligible to apply for payment suspension: companies only having
“performing” loans as of September 30, 2008 and not having any “rescheduled” or “nonperforming”
loans or pending enforcement procedures when they submitted their application for
payment suspension or extension with respect to advances on receivables;
- if a company is classified as “performing” and has no overdue payments when the application is
submitted, its application is to be considered approved by banks participating in the Advice,
unless they expressly reject it and provide a reason for rejecting it;
- if a company’s application for suspension of mortgage payments is approved, the loan
repayment period will be extended by the same term. Interest on the amount of suspended
principal shall be paid on the original due dates.
- applications must be submitted by June 30, 2010. The Advice shall apply to transactions having
the terms and conditions illustrated above or providing those that are more favorable for bank
customers.
No additional costs will be incurred by companies, apart from interest calculated on the basis of
the original agreement, and no further guarantees will be required.
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