Germany's Loan Repayment Pause for SMEs: What You Need to Know
Starting October 1, self-employed individuals and small to medium-sized businesses in Germany can pause loan repayments for six months under certain conditions. The German federal government has set limits for this option, which can only be used once every five years for loans taken out after March 1, 2024.
The limits for the loan pause are as follows: self-employed individuals can pause up to 10 million rubles, microenterprises up to 60 million, small businesses up to 400 million, and medium-sized businesses up to 1 billion. The federal government sets these limits and may adjust them in the future.
This option is designed for critical situations where businesses cannot service their debt. It's available to those who took out loans under preferential lending programs. However, medium-sized businesses must pay the interest monthly, and businesses in reorganization, bankruptcy, or liquidation, along with those having loans from microfinance organizations, are not eligible. Interest will continue to accrue during the deferment period.
The loan pause is a temporary measure to help businesses navigate financial difficulties. It's important to note that it can only be used once every five years and for loans taken out after March 1, 2024. The limits set by the program may be reviewed depending on budgetary capabilities and the restoration of financial health.
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