The new Micro Guarantee scheme through which enterprises employing up to 20 workers – including start-ups and self-employed – may be granted a guarantee to help them secure a loan from commercial banks participating in the scheme has come into effect.

Banif Bank, Bank of Valletta, HSBC Malta and Lombard Bank have confirmed their participation in the scheme and other banks may still be added to the list.

Administered by Malta Enterprise, the Micro Guarantee scheme is aimed at facilitating access to loans of up to €100,000 for eligible enterprises, which may use the funds to finance projects leading to business enhancement, growth and development.

Beneficiaries of the scheme will be able to obtain loans in favourable conditions, whereby they will be required to provide only 10 per cent (or less) of the value of an eligible loan as security.

Eligible costs include investment in tangible assets such as machinery and equipment; fittings, fixtures, refurbishment and restoration of commercial properties; investments leading to significant growth or to the development of a new market; immoveable property linked to a business development project and working capital linked to such investments.

The guarantee may only be used to support a new loan and may not be used to support overdrafts or other revolving credit facilities.

Malta Enterprise will receive applications for support under this scheme until 1 December 2013. It will give successful applicants a Letter of Intent that can be presented to any of the banks participating in the scheme.

The loan may be issued by any of the participating banks that will apply conventional lending criteria but are not committed to lend on the basis of the Letter of Intent issued by Malta Enterprise.

If the bank agrees to issue the loan, the bank will inform Malta Enterprise that the project was deemed to be commercially feasible and that a loan in favour of the beneficiary is being issued.

Malta Enterprise will not require security directly from the beneficiary. It will, however, require beneficiaries to pay an annual premium of two per cent over the value outstanding at the end of each calendar year.

Further information on the Micro Guarantee scheme, the incentive guidelines and an application form can be found on www.maltaenterprise.com/en/support/micro-gurantee-scheme.

It is recommended that potential applicants contact Business First at Malta Enterprise prior to submitting an application by calling 144 or by emailing [email protected]