69% of companies still awaiting government bailout finance

 In Economy, Industry, News

Portugal’s Industrial Confederation has warned that a €6.2Bn credit line has all but run dry while 69% of companies are still waiting for emergency cash that could spell the difference between their survival or closure.

Around seven out of every 10 companies that applied for emergency credit are still awaiting a reply while 68.8% of companies that asked for financial support have yet to receive it while the existing credit lines have run out.
CIP President António Saraiva issued his stark warning on Monday on the publication of the results of the survey ‘Vital Signs’ in which 41.7% of companies quizzed said they has either postponed or cancelled investments because of the economic fallout from the Covid-19 crisis.
“The credit line for companies had a total of €6.2Bn but applications have already totalled €10.5Bn,” said the CIP leader when presenting the results of the survey.
As applications have already exceeded the available amount by 69.4% there will be “companies that will never get access to this credit line if the Government doesn’t put more money in,” he said.
From the €6.2Bn of available credit earmarked, 98.3% has already been approved, which means €6.1Bn. However, from that amount approved, “Just €3.1Bn or around a half has actually been paid out to companies”. The reason why there is such a difference between money approved and money paid out is largely down to “excessive red tape in setting up and processing operations”.
In terms of company capitalisation, António Saraiva once again called on cash without strings rather than loans added to loans.
With 82.2% of those companies quizzed giving priority to capitalisation instruments, the leader of the CIP thinks it better to use taxes to subsidise companies and maintain jobs rather than using taxes to pay unemployment benefit as jobs vanish.