Practical COVID-19 outbreak advice

31 Mar

QDB soft loan scheme grants

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Upon the directives of HH the Amir Sheikh Tamim bin Hamad Al -Thani, to support the economic and financial sector within the framework of the precautionary measures to combat the spread of the coronavirus (Covid-19), and HH the Amir's directives to support and provide financial and economic incentives, amounting to QR 75 billion for the private sector, HE the Prime Minister and Minister of Interior Sheikh Khalid bin Khalifa bin Abdulaziz Al -Thani, directed to allocate guarantees to local banks at an amount of QR 3 billion.
Qatar Central Bank (QCB) said that the amount of QR 3 billion comes within the support package for granting soft loans and without commissions or fees for the affected companies to support salaries and rents through guarantees issued by Qatar Development Bank (QDB) to banks operating in the State.

The mechanism is detailed below and will be updated if we receive any updated information:

  • The company must be registered in the Ministry of Economy and Industry and have a valid Commercial Registration.
  • QFC companies are exempted from this program.
  • You can borrow up to QR 7,500,000 paid on three installments each QR 2,500,000.
  • The installments should be paid in three years maximum starting from the last borrowed amount settled by the bank; in other words, from the previous QR 2,500,000, you receive from the bank you count three years. It does not mean that each company is entitled to QR 7,500,000, the bank will study how much the company is incurring monthly salaries and rent and will decide accordingly.
  • In the first year, you have six months grace period; the interest will be borne by QDB, which is supported by the Qatari government.
  • In the second half of the year, your company will incur 2% only, and QDB will bear 1.5%. Please note that QCB rate (current rate is 2.5%) is subject to amendment, hence always you have to add 1%+QCB rate (now 2.5%)= 3.5%, from this percentage your company will bear 3.5% minus 1.5% (assumed by QDB) in which the total is equal to 2% only. In nutshell, first half, only principal, second half, principal plus 2% interest.
  • In the second and third year, the calculation will be 2%+QCB rate (now2.5%)=4.5%, and your company will assume the full interest.
  • The loan will not be provided as direct cash that you can use, but instead, they will transfer the money to your bank accounts to cover only the salaries and rent.
  • Rent charges that are already relief by the landlord are exempted from this program.
  • The cap is QR 10,000 per employee for the salaries. 
  • The monthly installment is QR 2,500,000 till they cover QR 7,500,000.
  • The application will be submitted to the company’s bank. The latter will study the application form along with supporting documents that prove the negative impact of this COVID-19. 
  • The Qatari Partner has to provide a personal guarantee to the bank in addition to the QDB guarantee. 
  • Real Estate, construction, contracting, and infrastructure are exempted from this program.
  • The Qatari who owns more than one company is entitled to apply only for one company that has impacted by COVID-19.

Each company has to arrange the following documents, and the application date starts tomorrow on the 1st of April in the banks. Each company can use its bank to apply and also get further information because the mechanism is also available with the banks.

  • Valid rent agreement.
  • Copy of the resident ID of the person who applies in which the person should be one of the names authorized in the Commercial Registration.
  • Valid Commercial Registration.
  • Personal guarantee and guarantee cheques (after the application's approval). This process will be discussed with the company’s Bank; it is based on their requirements.
  • Supporting documents using them as evidence that you have paid the rent (in case your company is exempted now by the landlord, then your company will not be entitled to claim the relevant amount).
  • Supporting documents using them as evidence that you have paid the salaries for the last three months through the WPS system.
Read 2385 times Last modified on March 31, 2020

Antonio Ghaleb is accredited in Qatar and holding the auditor’s registration number 348. Also he is a member of the following institutions: a) American Institution of Certified Public Accountant (AICPA), b) Guam Board of Accountancy, c) Certified in Risk Management Assurance “CRMA”, d) Chartered Global Management Accountant designation “CGMA”, and e) International Financial Reporting Standards (IFRS).

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