The government will establish two state-backed loan and guarantee schemes in the total amount of NOK 100 billion (approximately U.S. $10 billion) in an effort to provide liquidity for Norwegian enterprises.
State loan guarantees for new loans to small and medium-sized enterprises
- The government has proposed to establish a state guarantee targeted at bank loans to small and medium-sized enterprises suffering losses as a result of the extraordinary situation arising from the spread of the corona virus. The initial package of NOK 50 billion will be increased if needed.
Government Bond Fund
- The Government has further proposed to reinstate the Government Bond Fund. This will contribute to increased liquidity and access to capital in the Norwegian bond market, where larger companies typically raise their funding.
- "The Government Bond Fund will provide up to NOK 50 billion, to be invested in bonds issued by Norwegian companies. This is a measure we have positive experience with from the 2008 financial crisis", says the Minister of Finance.
- The fund will be managed by Folketrygdfondet, which is the state’s fund manager for the Government Pension Fund Norway.
The government has created a scheme that entails that the state covers a proportion of the fixed costs for companies that have a significant decrease in turnover due to the outbreak of viruses and infection control measures
- The scheme will be an application-based grant scheme and the funds allocated to the scheme will be a compensation for loss of revenue due to COVID-19 situation.
- In order to qualify, the applicant must evidence a shortfall in turnover for March of at least 20 percent. For April and May it is required to evidence a shortfall of at least 30 percent.
- The grant will as a maximum amount to 90 percent of the unavoidable fixed costs for businesses that have been closed down due to a government resolutions, and 80 percent for other businesses.
- The scheme will be in effect for March to August, and the payouts will be made on monthly basis. The scheme has been terminated post August, though deadline for application is 31 October.
- Entities must apply for the grant for one month at a time and successful applicants may receive compensation of up to NOK 80 million per month.