Armenian government expands benefits for small and medium-sized businesses

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YEREVAN, March 4. /ARKA/. The government of Armenia has expanded today the benefits designed for small and medium-sized businesses as part of its 3rd program to offset the economic consequences of the coronavirus crisis.

Economy Minister Vahan Kerobyan noted during the government meeting today that about 800 economic entities had received preferential loans in the amount of almost 9 billion drams to overcome the consequences of the crisis.

He said today’s decision is aimed at those economic entities that were unable to take advantage of the grace period. According to him, this will not affect the budget, but will greatly facilitates crediting terms .

With the changes, entrepreneurs who did not take advantage of the opportunity to get loans with preferential loan terms will be able to take advantage of a 6-month grace period.

The third government program was designed to mitigate the risk of current liquidity of the country’s small business entities that arose as a result of the coronavirus pandemic. It enabled small businesses to claim loans at 0% rate in the first 2 years, and at 12% for the rest of the maturity period (the effective annual interest rate is 1.37%).

This program is for entrepreneurs with an annual turnover of 24 to 500 million drams. The maximum loan amount is 50 million drams, but not more than 10% of the annual turnover of the company. The program also allows companies to draw up a 6-month grace period for the payment of the principal loan amount.

The loans can be used by the companies to pay salaries and other equivalent payments to their employees for a maximum of three months (but not more than 300,000 drams for each employee monthly), pay taxes, duties and mandatory government and community budget payments for a maximum of three months, procure and import f raw materials, with the proviso that they be used in Armenia for the production purposes by the same business entity, to pay electricity, water, natural gas, communications and telecommunications bills for a maximum of three months, as well as pay rents. ($1 – 525.99 drams). -0-

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