MICRO LOAN GUARANTEE REGULATIONS

MICRO LOAN GUARANTEE

SUBSIDIARY LEGISLATION 463.08

MICRO LOAN GUARANTEE REGULATIONS

1st January, 2013 *

LEGAL NOTICE 101 of 2013, as amended by Legal Notice 428 of 2013,

and 143 of 2017.

The title of these regulations is the Micro Loan Guarantee

Regulations.

In these regulations unless the context otherwise requires -

"assisted loan" means a loan granted by a licensed commercial

bank in terms of this Act and the repayment of which loan is

partially guaranteed by the Corporation;

"Corporation" means the Malta Enterprise Corporation

established under the Malta Enterprise Act;

"eligible enterprise" means an undertaking employing between

one to fifty persons (including the employer) whose annual

turnover does not exceed the sum of ten million euro

(€10,000,000), and whose balance sheet total for the fiscal year

preceding the date of application shall not exceed ten million euro

(€10,000,000) or such other number of persons, net value of plant,

machinery or equipment, or any other amount of annual turnover or

balance sheet total as may be prescribed in the Guidelines

"family business" shall have the meaning assigned to it by the

Family Business Act;

Provided that the undertaking is not linked to any

undertaking operating in Malta that has already been assisted in

terms of these regulations;

"Guidelines" means such guidelines that may be published by the

Corporation from time to time in accordance with these

regulations;

"Minister" means the Minister responsible for industry;

"qualifying activity" means an economic activity consisting of a

trade or business that may contribute to the economic development

of Malta

Provided that an undertaking shall not qualify for the

assistance provided by these regulations if such undertaking

operates any of the following sectors

(a) fisheries or agriculture;

(b) primary production of agriculture products;

(c) financial and insurance activities;

(d) gambling including online gambling; and

*see regulation 1(2) of these Regulations as originally promulgated.

MICRO LOAN GUARANTEE

"undertaking" means any self-employed person or any

commercial partnership constituted under the Companies Act, or

any co-operative society duly registered as such under the Co-

operative Societies Act.

(1) An eligible enterprise carrying on or carrying out, or

intending to carry on or carry out in Malta a qualifying activity,

which fails to obtain a conventional loan, may be considered by the

Corporation to be eligible for an assisted loan in terms of these

regulations.

(2) An application for an assisted loan shall only be considered

by the Corporation if it is intended exclusively for the acquisition of

tangible assets, intangible assets and working capital linked to such

acquisitions.

Assisted loans under these regulations may not exceed the

maximum limit of one hundred thousand euro (€100,000) or such

other maximum limit as may be prescribed in the Guidelines.

The term of any assisted loan shall be for a maximum

period of ten years from the date of the grant of the respective loan.

(1) The Corporation’s guarantee exposure regarding an

assisted loan shall not exceed at any moment in time eighty per

centum of the total outstanding loan balance due to the bank which

shall not exceed the sum of eighty thousand euro (€80,000)

Provided that as from the 1st January 2017, the Corporation’s

guarantee exposure regarding an assisted loan shall not exceed at any

moment in time eighty per centum of the total outstanding loan

balance due to the bank which shall not exceed the sum as prescribed

in the Guidelines.

(2) The Corporation’s guarantee of the repayment of an

assisted loan shall be subsidiary to the principal liability of the

eligible enterprise to whom an assisted loan has been granted.

An eligible enterprise qualifying for an assisted loan shall -

(a) furnish to the Corporation and the bank such

information and other documents which the

Corporation or the bank may deem to be necessary for

the purpose of these regulations;

(b) provide the Corporation and the bank with reasonable

access to all premises, places, books and other

documents, and allow copies to be made for the

purposes of these regulations.

Notwithstanding anything contained in the foregoing

provisions of these regulations, the Corporation shall have the right

to declare not eligible any application under these regulations.