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Parliament to debate £30m business loan scheme

Eyleen Gomez

The Gibraltar Government has negotiated an agreement with Gibraltar’s banks to provide up to £30m in loans to local businesses that have been affected by the Covid-19 pandemic.

The Gibraltar International Bank, The Royal Bank of Scotland International Limited, Gibraltar Branch and Trusted Novus Bank Limited have agreed to participate in the scheme which will be known as the Gibraltar Business Disruption Loan Guarantee Scheme.

This scheme is designed to provide finance from any of the participating banks to businesses in Gibraltar that have been affected by the Covid-19 pandemic.

At today’s meeting of Parliament the Government will move a motion calling on the House to support the scheme, which has the backing of the Opposition.

According to the motion the scheme will offer lending to borrowers in a manner that is guaranteed by the Government in a sum of 80% of the amount of any borrowing agreed, with the balance of risk being borne by the relevant lending bank.

The motion calls on the House to support the Government's decision that the lending banks should be able to offer lending to qualifying borrowers up to a maximum amount of £30m in loans and facilities under the scheme.

This works out to £10m per lending bank.

The scheme requires a guarantee involving a financial liability that binds the Government and therefore requires a resolution from the House.