May 19, 2020 / 4:37 PM / 10 days ago

Brazil launches new financing program for small companies amid pandemic

BRASILIA (Reuters) - Brazil’s government on Tuesday launched a new credit line aimed at helping small companies weather the economic crisis stemming from the coronavirus pandemic.

The country’s Treasury will use 15.9 billion reais ($2.78 billion) to cover potential loan defaults, limited to 85% of each loan extended. The remaining part should be covered by financial institutions providing the loans.

Companies with annual revenue of up to 4.8 million reais ($834,000) can apply for this new credit line, which costs Brazil’s benchmark interest rates plus 1.25% per year. There is no grace period for repayments.

Earlier in April, Brazil’s government launched a payroll program aimed at companies with annual sales between 360,000 reais and 10 million reais.

Reporting by Isabel Versani, in Brasilia, writing by Carolina Mandl; editing by Bill Berkrot

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