Caixa, Sebrae open credit line for small businesses

Caixa, Sebrae open credit line for small businesses

Loans Economy & Policy Debt Coronavirus Regulation Brazil

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State-owned savings bank Caixa Econômica Federal and the small business association Sebrae announced on Monday a new credit line for small businesses in Brazil.

The credit line, part of the federal government's measure to reduce the economic impact from the coronavirus outbreak, could provide up to BRL7.5 billion ($1.41 billion) in loans for small and medium-sized businesses in Brazil, Caixa and Sebrae said in a press release.

Sebrae will manage the funds through its small business support fund, called Fampe, including BRL500 million in loan guarantees.

Self-employed individuals can get two-years for up to BRL12,500 at a rate of 1.59% per year, while micro businesses can get 2.5-year loans for BRL75,000 at 1.39% and small businesses can get three-year loans for BRL125,000 at 1.19%, according to the press release.

Caixa said in a separate statement that it has granted BRL11.4 billion in emergency loans since April 9, when the federal government set up a program to get funds to informal workers, self-employed individuals, freelancers and the unemployed during the coronavirus pandemic.