Trust money to rescue companies arrives after 3,500 of them have already gone bankrupt | News from El Salvador

Bandesal will make $ 70 million available to companies starting this month after six months of its announcement.

The $ 600 million Trust administered by Bandesal that will serve to rescue the companies affected by the quarantine ordered by the Government will begin to be disbursed from this month, after having been announced six months ago and when more than 3,500 companies already went bankrupt.

The President of the Republic, Nayib Bukele, together with the President of Bandesal, Juan Pablo Durán, announced that the trust has already been fully financed and that in the next few days the first $ 70 million will be available to pay the payroll of the companies affected by the COVID-19 crisis.

The support consists of $ 140 million within the Trust to pay payroll to companies with less than 99 employees and that bill less than $ 7 million a year, of which $ 70 million will be available from October and another $ 70 million will be available until November, the president explained.

That Trust, which President Bukele assures is already “Fully funded”, would support the payment of payroll of employees of affected companies by the confinement measures.

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Companies must submit a request to Bandesal to access this money, to which Durán said that they will reinforce the number of personnel to meet the demand since they know that many companies will come to request it. In addition, Durán indicated that the fund is not reimbursable and that only the legal existence of the company will be required., but you will not need solvency.

“You will not need collateral, you will not need solvency if you do not ask us for more than $ 30,000. This money is exclusively for economic recovery, to return the company to normality “Durán said.

Another $ 360 million will be earmarked for low-interest loans aimed at formal micro, small, and medium-sized companies and an additional $ 100 million will be earmarked for loans to informal MSMEs. These credits will be at 3% rates and for a 10-year term.

“Merchants who wish to access the credit line must have had some credit in the national bank, have obtained financing from lenders or be registered in Conamype”Durán said.

However, the availability of money comes at a time when hundreds of companies have gone bankrupt after having been without income for more than 80 days, in one of the longest quarantines that Latin American countries have had.

According to the National Association of Private Enterprise, ANEP, some 3,500 companies have gone bankrupt.

For Guillermo Guido, president of the Mipyme Union, the support announced by the president, although it will serve to pay the payroll of employees and leverage the productive sector, this support comes late.

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“The timely help is not, because some 3,000 micro and small businesses have already died that have already closed. But help is always welcome, more if it is to pay payroll, but it has taken six months since you gave the
first ad ”, highlighted Guido.

The final closure of several stores began in late May Photo EDH / Menly Cortez

Regarding the support of productive financing, he affirms that this was urgent due to the need to reactivate the economy.

“Companies are making an effort to pay taxes and catch up with so many things that we stop paying in these days of production cessation,” he explained.

He states that during the economic stoppage he was only able to pay half a salary to his collaborators and there is a need to update their salaries.

Economists warn that the government will have “discretion” to deliver funds

That the government has $ 600 million from a trust that will be administered by Bandesal and that will be delivered to the MSMEs when the electoral campaign is at the doorstep opens the way to possible arbitrariness in the distribution of that money, economists consulted by this newspaper.

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The economist Rafael Lemus told El Diario de Hoy days ago that the subsidy component “It is the one with the greatest discretion because it is basically a gift.”

For him, because the money that goes to subsidize employee salary payments will be insufficient, “vIf there will be discrimination and there will be people who benefit and others who do not, there will be a margin of discretion for whoever is delivering the benefits, which in this case is the government ”.

However, Lemus affirms that where there would be more discretion is with the $ 100 million that Bandesal will handle for informal companies, because an informal merchant cannot be asked for quotation records nor will there be an objective database.

The government authorities revealed what are the requirements and steps to apply for the subsidy:

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