All banks can include part of the envelope in new additional loans and credit lines in proportion to their market share in outstanding loans and credit lines (all loan terms) granted to viable non-financial businesses, SMEs, self-employed persons and non-profit organisations on 31 December 2019. This market share was ascertained on the basis of FINREP (table 20.04) and scheme A (table 02.11) reporting and notified to all institutions by individual standard NBB letter of 14 April 2020. Institutions may use up to 20% of the envelope thus allocated to them to grant guaranteed loans under the second guarantee scheme.

Unlike the first guarantee scheme, the second guarantee scheme is optional. Consequently, at the moment a loan is granted, the lender should specifically identify the loans he wishes to include in the guarantee scheme. In other words, the choice for the guarantee scheme is made (at the latest) at the moment the loan is granted, subject to the agreement of the borrower.

The guarantee applies to individual loans, for which 80% of the losses will be borne by the State.

None. The second guarantee scheme is optional for banks (credit institutions under Belgian law and branches of foreign credit institutions) which had more than € 20,000 in outstanding loans and credit lines to non-financial businesses, SMEs, self-employed persons and non-profit organisations on 31 December 2019.

The State will bear 80% of a lender’s loss on a loan. The remaining 20% of the loss will continue to be borne by the lender concerned.

In principle, all new additional loans and credit lines to small or medium-sized non-financial enterprises with (see questions 4.1-4.3 for definition) a term of 12 to 36 months (prolonged to five years by Royal Decree of 24 December 2020) granted by the bank between the date of entry into force of the Law (24 July 2020) and 31 December 2020 (initially prolonged to 30 June 2021 and subsequently until 31 December 2021 by Royal Decree of 24 December 2020, as amended by Royal Decree of 14 June 2021) are (optionally) eligible for the second guarantee scheme (until the bank’s share in the total € 10 billion envelope is reached).

The following credits do not fall within the scope of the guarantee scheme:

1. refinancing loans which serve to repay loans granted before the date of entry into force of the Law (a loan or a part of a loan which is granted to repay a non-deselected loan covered by the first guarantee scheme and for which the lender expects that he will have to take a forbearance measure on its maturity date is not considered a refinancing loan);
2. reinstatements of credits granted before the date of entry into force of the Law;
3. leasing contracts;
4. factoring contracts;
5. consumer loans and mortgage loans which are governed by Book VII of the Code of Economic Law.

All new additional loans and credit lines to all small or medium-sized non-financial enterprises (see questions 4.1-4.3 for definition) with a term of 12 to 36 months (prolonged to five years by Royal Decree of 24 December 2020) are eligible for the guarantee scheme, except for the credits mentioned in the answer to question 4.13.

Yes, insofar the distinct credit of the participating bank in the syndicate constitutes a sufficiently differentiated engagement. That bank’s engagement is sufficiently differentiated from the engagements of the other lenders if the former engages to make a fixed maximum amount available (the “commitment”). In that case, the bank’s engagement is considered a separate credit (and only the amount made available by this bank is taken into account for the calculation of the premium and the guaranteed amount).

That is a reinstatement of an existing credit/existing credit line which is not covered by the guarantee scheme.

Yes, the difference between the higher line (e.g. € 110,000) and the existing line (€ 100,000) is then a new loan which is eligible for the guarantee scheme. This new loan must then be structured as a separate new loan (of € 10,000, for example).

Yes, in the case of new additional loans or credit lines in relation to the amount of loans and credit lines outstanding on the date of entry into force of the Law. The guarantee scheme aims at facilitating the granting of new additional credits or credit lines.

The guaranteed principal of the guaranteed loans granted to a borrower may not exceed the highest of the following amounts, calculated at the level of the group to which the borrower belongs:

1° the borrower’s liquidity needs during a period of 18 months from the intended date of the granting of the guaranteed loan, as estimated by the borrower in a duly reasoned written statement;

2° the double of the borrower’s total annual wage costs, including social charges, in the most recently closed financial year before 1 January 2020;

3° 25 % of the borrower’s turnover in the most recently closed financial year before 1 January 2020[1]

The resulting maximum guaranteed principal should be reduced by the principals of the loans granted to the borrower (or other companies belonging to the group of the borrower) under the first guarantee scheme, insofar as they are not refinanced by loans covered by the second guarantee scheme.

[1] Article 8, §1 of the Law of 20 July 2020, amended by Article 402 of the Law of 27 June 2021 on various financial provisions.

May normal repayments of both capital and interest of loans granted before the date of entry into force of the Law be included in the simulator-based liquidity assessment ? Are loans taken out to service these repayments covered by the State guarantee?

It should be noted that, if the loan amount is less than double the total annual wage costs, including social charges, or less than 25% of the borrower’s turnover in the most recently closed financial year before 1 January 2020, liquidity needs do not necessarily have to be taken into account for granting a loan under the second guarantee scheme.

If they are nevertheless taken into account, Article 8, § 1, 1° of the Law specifies in this regard that the relevant liquidity needs limiting the guaranteed principal do not include the borrower’s needs to repay or reinstate loans granted before the date of entry into force of the Law. However, a loan or a part of a loan which is granted to repay a non-deselected loan covered by the first guarantee scheme and for which the lender expects that he will have to take a forbearance measure on its maturity date is not considered a refinancing loan. Thus, the financing of repayments of a loan granted by the same or another lender prior to the date of entry into force of the Law qualifies in principle as a refinancing loan within the meaning of Article 3, 12° of the Law, is not eligible for the guarantee scheme and may therefore not be included in determining the liquidity needs under Article 8 of the Law.  The reason is that a guaranteed loan is not intended to be used to repay an existing loan (OLD MONEY). Moreover, if the conditions of the Business Loan Charter are met, (capital) repayments are eligible for deferral of payment.

On the other hand, the lender should identify the overall liquidity needs of the borrower in order to be able to correctly assess the risks. However, the lender may include repayments of loans granted before the date of entry into force of the Law in this exercise without, however, including them in determining the liquidity needs under the (specific) framework of Article 8 of the Law. Therefore, for the purposes of determining the amounts covered by the guarantee scheme (NEW MONEY), the repayments are best treated separately in the liquidity simulator.

No. The guarantee scheme does not apply to loans existing on the date of entry into force of the Law, nor to the unused amounts on credit lines existing on the date of entry into force of the Law.

Banks must call on the State guarantee by the last day of the month that falls one year and six months after the last possible maturity date of a guaranteed credit [1] at the latest for the guaranteed loans, and this independently of the date of granting or the duration of the loan.  Only then should a decision be taken as to whether or not to terminate the customer relationship. In the meantime, forbearance measures can be taken.  The diagram below gives an overview of the various possibilities:

[1] Article 15 of the Law of 20 July 2020, amended by Article 403 of the Law of 27 June 2021 on various financial provisions.

4.30/1 If a forbearance measure is a deferral of payments (e.g. in the form of a repayment schedule, extension of the initial loan or otherwise) on the guaranteed loan, are the parties bound by the maximum period of the guaranteed loan (36 months under the second guarantee scheme, prolonged to five years by Royal Decree of 24 December 2020)?  

No, the maximum period of 36 months (prolonged to five years by Royal Decree of 24 December 2020) does not apply here. Please refer to the schedule as included in question 4.30: a forbearance measure can only be granted up to the last date on which the State can be called upon to honour the State guarantee. This last date is the last day of the month that falls one year and six months after the last possible maturity date of a guaranteed credit [1] for the second guarantee scheme. 

[1] Article 15 of the Law of 20 July 2020, amended by Article 403 of the Law of 27 June 2021 on various financial provisions.

“Proportionate application” means that, if a forbearance measure is granted in the form of a deferral of payments on a guaranteed loan, the other loans not covered by the State guarantee should also benefit from a payment deferral for at least the same period.

For example, if a forbearance measure is granted for a guaranteed loan, in the form of a payment deferral (e.g. repayment of a 15-month loan postponed by 6 months), all other current loans must also benefit from a deferral for the same period of at least 6 months (e.g. a 5-year investment loan must also benefit from a deferral of at least 6 months). 

If there are other current loans covered by the State guarantee, the proportional payment deferral has no impact on the maintenance of the State guarantee.

The bank will first have to "enforce" the customer (i.e. draw on all of the customer's funds, collateral, guarantees, etc.) before the residual amount can be considered as a loss for calculating the State guarantee. This enforcement does not have to occur or be finalised at the moment that the State guarantee is called on.

In principle it cannot, except as collateral for any financing granted to a bank by the National Bank of Belgium in the context of its legal mission. The collateral may relate to the loans themselves or to the securities issued by the Bank for the securitisation of these loans.