The Corona virus crisis hit the global economy hard, and the 2020 Global GDP forecast shows a strong contraction, and due to that many businesses in Italy, and globally, are facing cash crunches and financial difficulties.
The Italian government introduced various measures at different steps to tackle this issue. First of all, current loans were suspended until late May; later, the 600€ COVID19's indemnity to cover the loss of revenue during March was introduced.
However, those actions are not sufficient to sustain the businesses and self-employed struggling with mandatory shutdown, loss in revenue, and rising costs to face once the situation will stabilize.
The Italian government decided to undertake a courageous plan to fix the problem. In summary, every business or self-employed can apply for a government-backed loan up to 25% of the annual turnover up to € 25.000,00.
Who are the beneficiaries?
According to the law only SMEs, sole proprietors, and self-employed are eligible to this program; companies must not be classified as non-performing prior January 31st 2020, overdrafts do not preclude the access to this program.
Loan terms and conditions
The total financeable amount is 25% of last year’s revenue, up to € 25,000.00, and the government-backed guarantee matches the amount financed.
The total duration of the loan is up to 6 years, including a grace period up to 2 years; the payback period is flexible and is agreed with the bank; however, it cannot be extended beyond the 6 years.
The law caps the interest payable to 1.23%, including setup fees, and every other cost.
The loan is granted by banks and financial institutions and you can apply to more than one bank at the same time, however, the total amount financeable remains € 25,000.00.
How to apply
+We advise to get in touch with your trusted local bank to apply and the required paperwork is the following:
Finally, there are no credit checks, nor credit rating evaluation. Because the government backs your application eligibility criteria are set by the law and they are not based on a credit rating chart.
Do you need support? Contact us with no obligations.
Assuming you apply for € 25,000.00, opting for the 6 years monthly payback plan at 1.23% fixed interest rate. Your monthly cash outflows will look like this:
1-24 months € 25.63 per month
25-72 months € 534.02 per month
For the whole duration of the contract you will pay € 1248,00 in total.
Note that if you do not pay any further fee, your bank might also apply more favourable conditions, and interests are tax deductible against taxes.
Check out all the financial supports provided by the Italian government in this video.
Do you need the 600€ indemnity from INPS?
Check out this step by step on how to request it.
Want to read more? Check out also our articles about filing your taxes in Italy, airbnb taxes in Italy, or our guide for retiring in Italy.
After moving back to Italy from the United States in 2013, I realized how much an accounting and tax firm was needed to help expats living in Italy to comply with the local tax regulations.