RIGA - Increased funding to the working capital grants program will enable businesses to avoid bankruptcies, Prime Minister Krisjanis Karins (New Unity) said at the government meeting Thursday.
The government has endorsed the Economics Ministry's proposal to increase the amount of funds available under the working capital grants program more than fourfold up to EUR 310.8 million.
Karins pointed out that his Cabinet is sometimes criticized for not providing sufficient support to businesses but today's decision proves the opposite. "This support will help prevent many companies from going bankrupt and will enable them to resume operations as soon as the situation permits," the prime minster said.
Economics Minister Janis Vitenbergs (For Humane Latvia; KPV LV) informed that the average support provided to a company under the grants program is EUR 12,000.
After analyzing the working capital support program, the Economics Ministry has concluded that the previous estimate, which set the amount of potential support at EUR 60 million, is very close to the current situation. However, the amendments to the support program, which were approved on January 28 and February 4 this year to expand the range of support recipients, have not yet come into force as they are still being coordinated with the European Commission.
"It is clear that the funds available under the support program have almost been used up, and for the program to continue from February through May will additionally require at least EUR 240 million. It must also be taken into consideration that this is a cautious projection of additional funding as it is possible that additional funds will have to be allotted from the state budget if applicants' activity increases," said the Economics Ministry.
The Economics Ministry therefore proposes increasing funds for the working capital support program from the current EUR 70.8 million to EUR 310.8 million by takin the extra financing from the budget's contingency funds.
According to the Economics Ministry, 9,949 applications for the grants were received on February 17 for a total amount of EUR 91,559,486, and a total of EUR 26,493,365 was paid to 3,334 applicants.
Businessmen may apply for grants for working capital each month until May 31, 2021 through the Electronic Declaration System. They will have to use the support until July 31, 2021.