Scope
3.1 Who is this scheme aimed at?
All non-financial businesses, SMEs, self-employed persons (including unincorporated self-employed persons) and non-profit organisations without payment arrears on 1 February 2020 or less than 30 days in payment arrears on 29 February 2020and which did not undergo active debt restructuring on 31 January 2020.
The payment arrears referred to include arrears on both bank loans and tax and social security contributions.
3.2 What is meant by “non-financial businesses”?
A non-financial business is an undertaking which does not fall within one of the following categories: (i) a financial counterparty within the meaning of Article 3 point (3) of EU Regulation 2015/2365, a payment institution or electronic money institution or a special purpose securitisation vehicle, (ii) a natural person, legal person or group of such persons granting exclusively or in principal loans for their own account as part of their usual commercial or professional activities, or (iii) a natural person, legal person or group of such persons exercising direct control over an entity as referred to under (i) and (ii).
Although the scheme is aimed at a wider public, it is clarified that the following sectors/activities also qualify:
- Non-profit organisations, both social enterprises and others, including hospitals
- Non-financial institutions having a public shareholdership
- Banking and insurance intermediaries (agents and brokers)
- Regulated real estate companies
- Holding companies whose main activity consists in holding shares in NFCs
Conversely, counterparties connected with government (e.g. PSEs, associations of local authorities, public social assistance centres, etc.) are excluded insofar as they are designated as S13 in column D of the list of public units published by the National Accounts Institute.
Apart from large undertakings, the payment delay also applies to SMEs, self-employed persons and those in the liberal professions not operating through a company.
3.3 Does the scheme apply to foreign businesses?
The scheme is only available to Belgian residents. Belgian residents could be both undertakings incorporated under Belgian law and branches with a permanent establishment in Belgium. Legal provisions have been introduced to ensure that the guaranteed loans are used for the benefit of the undertakings’ Belgian activities and that the loans are not in a large part used for the financing of the foreign activities of the borrower (the loan contract has to exclude such use or limit it to 10% of the guaranteed loan; losses on guaranteed loans which do not exclude such use are not compensated). A provision has also been inserted to ensure that in such case local facilities for financing, whether or not under local guarantee schemes, are being exhausted for these foreign activities. However, banks are free to grant loans outside the scope of the guarantee scheme, which contractually state that they can only be used for the non-Belgian activities of the Belgian resident.
3.3/1 Does the guarantee scheme also apply to loans granted to companies established in Belgium whose core business is conducting trading activities aimed at exporting and importing goods to or from abroad?
Yes, the guarantee scheme applies to such loans. In other words, such business is regarded as activities conducted in Belgium and not as 'qualifying foreign activities', the financing of which can only be covered by the guarantee scheme under strict conditions and restrictions (cf. Art. 22, 3°, b) of the Royal Decree).
3.4 Is there to be a threshold for payment arrears in the case of viable businesses?
Credit obligations past due, for the purpose of defining non-financial corporations, SMEs, self-employed persons and non-profit organisations who had, on 1 February 2020, no arrears and were in arrears of less than 30 days on 29 February 2020, shall be subject to a materiality threshold as defined in the EBA Final draft RTS on the materiality threshold for credit obligations past due and the ECB regulation (EU) 2018/1845. For non-retail, the absolute threshold is set at 500 euro and the relative threshold at 1%, consistent with the threshold applied for the Definition of Default.
3.5 Does the customer have to confirm the viability condition by signing a “sworn declaration”?
This must form part of the contractual conditions which the customer undertakes to respect. The sector can draw up standard clauses for use in this connection.
Among other things the contractual conditions must also include confirmation that the total capital sum of the outstanding (taken up and non-repaid) or available (non-taken up) guaranteed loans for the customer or group of associated customers does not exceed the limit of € 50 million.
3.6 Exclusion criteria: How does a bank have to provide proof that there were no payment arrears on 1 February 2020, or less than 30 days’ payment arrears on 29 February 2020? Or is no proof required?
The bank does not have to provide any “proof”, but the bank needs to check the criteria as far as possible. This should also form part of the contractual conditions which the customer undertakes to respect.