Liquidity decree: 400 billion to companies, here's how

200 billion is on the way for companies operating on the domestic market and the same for those that export - The money will be used to guarantee bank loans of up to 5 million and with a maturity of up to 6 years - Here are the rules, percentages and conditions

"A firepower" that in Italy "has never been seen" until today. This is how Prime Minister Giuseppe Conte presents the liquidity decree, which contains a series of measures to help Italian companies overcome the crisis triggered by the coronavirus. The provision - approved on Monday by the government at the end of a long (and troubled) Council of Ministers - is worth the full amount monstre of 400 billion euros, equally divided: 200 for companies that operate on the domestic market and the same for those that export.

LIQUIDITY DECREE: HOW IT WORKS

Obviously, the State does not disburse this money directly to companies, but puts it into the system to guarantee bank loans with maturities of up to 6 years. The operation takes place through the Central Guarantee Fund for SMEs (which is being strengthened) and Sace (a company controlled by Cassa Depositi e Prestiti). Basically, if the company doesn't pay, the money is put in by the State, so the institutions no longer have any reason not to provide credit.

In this way the funds will arrive "quickly - explained Conte at the press conference - We will strengthen the central guarantee fund for SMEs and add state funding through Sace, which is and remains within the scope of Cassa depositi e prestiti, for small medium and large companies".

From today's decree comes 400 billion of liquidity for companies, with the #CuraItalia we had freed 350. We are talking about 750 billion, almost half of our GDP. The State is there and immediately puts its firepower into the engine of the economy. When Italy gets up, it runs
- Giuseppe Conte (@GiuseppeConteIT) April 6, 2020

PUBLIC GUARANTEES ON LOANS: PERCENTAGES AND AMOUNTS

The guarantee scheme is as follows:

90% for large companies;
100% for small businesses and the self-employed who ask for up to 25 thousand euros (only in this case it is not necessary to assess creditworthiness);
100% (90% of the State plus 10% of Confidi) for loans up to 800 thousand euros;
90% up to 5 million.

UP TO 25 THOUSAND EUROS THE LOAN IS AUTOMATIC

The Minister of Economic Development, Stefano Patuanelli, specified that to have the 100% public guarantee on a loan of up to 25 thousand euros "it will be enough to demonstrate that you have a VAT number and the last tax return presented or the payment of taxes: in in this way the bank will be able to disburse the loan immediately, because the guarantee is automatic. There is no bank evaluation procedure, because the guarantee from the state is full”.

TWO CONDITIONS TO BE RESPECTED

In any case, in order to obtain the guarantees, entrepreneurs must comply with two conditions:

do not fire;
do not transfer production abroad.

THE OTHER MEASURES

The liquidity decree also contains other measures: from the acceleration of PA payments to the suspension of terms for those in debt to the tax authorities, passing through the extension of the "golden power", the special power that the government exercises to defend companies strategic from takeover attempts arriving from abroad. “We will be able to control corporate operations and hostile takeovers not only in traditional sectors – Conte said – but also in the insurance, credit, financial, water, health and safety sectors. It is a tool that will allow us to intervene if there are acquisitions of shares just over 10% within the EU”.

Also on Monday, the government also gave the green light to the school decree.