The Belgian State guarantee regime: can guaranteed loans bridge the Covid-19 financing gap?

As the economic consequences of the Covid-19 pandemic continue to develop, it has become clear that a number of companies are facing liquidity issues, whether due to decreased revenue, tightening of the credit market or otherwise. The Belgian government has taken measures to help companies weather the storm.
To that effect, the Belgian government has put in place a mechanism whereby qualifying short-term credits granted by credit institutions to viable non-financial companies will benefit from a State guarantee. This should encourage credit institutions to continue their lending into the Belgian economy so as to preserve economic activity.
In this alert, we answer the most prevalent questions asked by companies and lenders. This will help in the assessment of whether a company can benefit from a guaranteed credit and how to incorporate this into its credit documentation.
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