Second and Third Charter: apply for a COVID-19 repayment holiday for your KBC Brussels Investment Credit

Second and Third Charter: apply for a COVID-19 repayment holiday for your KBC Brussels Investment Credit

Background

The coronavirus crisis continues to have a severe impact on Belgium’s economy.

The Belgian Minister of Finance and Febelfin (the Belgian federation for the financial sector) had previously agreed that, in certain cases, companies would be granted another repayment holiday for their business loans.

That agreement was laid down in the 'Second Charter for business loan repayment holidays' at the end of December 2020.

Under it, you could request deferral of payments that were due in January, February and March 2021 (until 31 March 2021 at the latest). The repayment holiday granted under the First and Second Charters combined could not exceed nine months.

Since then, the banking sector and the minister have taken the following additional measures:

  • The Second Charter - which gave companies the opportunity to obtain a repayment holiday up to and including 31 March 2021 - has been extended to 30 June 2021. The request to take a payment break must be submitted by no later than 31 March. All the other criteria in the Second Charter, including the maximum term of nine months for such a holiday, remain in force. Learn more

  • Companies that have already reached the maximum term of nine months for the repayment holiday and that are in a financially healthy position will be given the opportunity under the Third Charter to request an additional holiday until 30 June 2021. Learn more

  • No administration or handling fees will be charged.

Other solutions remain possible and will be considered on a case-by-case basis.

For more information, please go to the Febelfin website.

Who is eligible for a repayment holiday under the Second Charter?

A repayment holiday can be requested for non-financial companies, SMEs, the
self-employed and non-profit organisations
that meet each of these four criteria:

  • The company/organisation is faced with payment problems due to the coronavirus crisis:

- Turnover or business activity has fallen or will fall
- Measures for temporary or permanent unemployment have been fully or partially introduced
- The government has ordered the company to close as a measure to contain the spread of the coronavirus

  • The company/organisation is permanently established in Belgium.

  • The company/organisation had no arrears on its current loans or in relation to its tax liabilities or social security contributions on 1 September 2020 or had less than 30 days arrears on its current loans or in relation to its tax liabilities or social security contributions on 30 September 2020. Payment holidays (e.g., relating to VAT, social security contributions, the First Charter) that were granted as Covid-19 financial support are not regarded as arrears.

  • The company/organisation has met its contractual loan obligations with all banks in the 12 months prior to 31 August 2020 (a repayment holiday granted under the First Charter is not regarded as an infringement of contractual loan obligations). In addition, the company / organisation was not subject to active forbearance measures prior to 31 August 2020.

Public authorities are excluded from applying.

Offer

You can request a break from paying amounts due in February, March, April, May and June 2021 (until 30 June 2021 at the latest) solely on loans (with a fixed repayment schedule – advances in current account – straight loans) that were granted prior to 1 April 2020. The repayment holiday granted under the First and Second Charters combined may not exceed nine months in total.

  • If you're applying for a repayment holiday for the first time, the holiday will last until 30 June 2021.

  • If you've already been granted a repayment holiday under the First Charter, you can get another payment deferral if the holiday granted under the First and Second Charters combined did not exceed nine months.

Example: your company has already been granted an eight-month repayment holiday under the terms of the First Charter. In that case, the maximum break you can get under the terms of the Second Charter is one month.

Important: request your repayment holiday no later than 10 calendar days prior to the next repayment due on your loan and by no later than 31 March 2021.

Repayment of the principal on your business loan will be temporarily stopped. No charges will be applied. Any interest due will, however, still be collected.

The term of your credit will also be extended, so as to ensure that the amount you regularly pay back will remain the same (principal plus interest) when you start repaying your loan again. The term of the loan will be extended by the length of time the repayment holiday lasts.

Who is eligible for the additional repayment holiday for financially healthy companies under the Third Charter?

All financially healthy companies (non-financial companies, SMEs, the self-employed and non-profit organisations) that had previously been granted a repayment holiday under the First and/or Second Charter – and where the maximum period of nine months has been reached – may request an additional holiday until 30 June 2021.

A business is considered financially ‘unhealthy’ if, at the end of 2019, it had negative equity combined with one of the following:

  • The company/organisation had arrears on its current loans or in relation to its tax liabilities or social security contributions on 1 September 2020 or had more than 30 days arrears on its current loans or in relation to its tax liabilities or social security contributions on 30 September 2020. Payment holidays (e.g., relating to VAT, social security contributions, the First Charter) that were granted as Covid-19 financial support are not regarded as arrears.
  • The company/organisation hadn't met its contractual obligations with all banks in the 12 months prior to 31 August 2020 (a repayment holiday granted under the First Charter is not regarded as an infringement of contractual loan obligations) or was subject to active forbearance measures prior to 31 August 2020.
  • The company/organisation made a loss in 2019.
  • Negative equity at present and no means to strengthen its capital position in the short term.

Offer

You can request a break from paying amounts due in February, March, April, May and June 2021 (until 30 June 2021 at the latest) solely on loans (with a fixed repayment schedule – advances in current account – straight loans) that were granted prior to 1 April 2020.

Important: request your repayment holiday no later than 10 calendar days prior to the next repayment due on your loan.

Repayment of the principal on your business loan will be temporarily stopped. No charges will be applied. Any interest due will, however, still be collected.

The term of your loan will also be extended, so as to ensure that the amount you regularly pay back will remain the same (principal plus interest) when you start making repayments again. The term of the loan will be extended by the length of time the repayment holiday lasts.

Practical details

If you think you are eligible for a business loan repayment holiday under the Second Charter, contact your KBC Brussels branch or KBC Brussels Live.

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