Prague Companies Are Unlucky. They Don’t Meet the Requirements for the COVID II Loan

The Czech entrepreneurs are waiting to receive the second wave of government loans to help small and medium-sized businesses affected by the coronavirus crisis.

However, Prague companies cannot apply (yet) for loans because the funds are provided from the European Union to support entrepreneurship and innovation in the poorer regions. Prague City is not one of them.

1.5 billion CZK will be set aside for applications for loans under the COVID II program and entrepreneurs will be able to claim from 10,000 to 15 million CZK.

However, Prague businesses and companies can’t require loans, yet. “We wanted to deploy the money quickly, so we used European funds from the Operational Program Enterprise and Innovation for Competitiveness as the main source. However, they cannot be used for the Prague region. If a company is based in Prague but has branches in other Czech regions, it can apply for a loan. But only to cover operating expenses in those regional establishments,” said Jiří Jirásek, head of the Czech-Moravian Guarantee and Development to

Entrepreneurs affected by coronavirus will be able to apply for loans to pay operating costs, ie wages, rentals, energy, supplier-buyer invoices. It will not be possible to use this money for investments or for refinancing other loans.

The former chairman of TOP 09 and member of the Prague coalition, Jiří Pospíšil, have been highly critical: “This is absolutely scandalous. Prague’s entrepreneurs cannot apply for interest-free loans that the government has prepared to help out due to the coronavirus crisis. At the same time, the crisis will have the greatest economic impact on Prague entrepreneurs, especially in the tourism sector,” said Pospíšil.

Most likely, Prague will enter in the third wave of loans, which is expected to provide 40 billion CZK. “We are negotiating with the City of Prague and the Ministry of Industry and Trade to offer similar financing to these companies as soon as possible,” Jirásek said.


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