Signet Bank has joined the Finance Latvia Association moratorium on corporate loan principal payments, which enables legal entities facing short-term financial difficulties due to COVID-19 to defer their payments of loan principal for up to six months.
We are committed to finding the best solutions and supporting Latvian enterprises in overcoming adversity and staying competitive. That’s why we have not only joined the moratorium developed by the Finance Latvia Association for aiding individuals, but are also extending a helping hand to legal entities with their payments of loan principal for up to six months.
Roberts Idelsons, CEO at Signet Bank
The conditions of this moratorium extend to legal entities and economically active persons that are not self-employed. The moratorium incorporates a principal repayment schedule modification where the loan agreement specifies principal repayment in instalments. The client may choose to fully or partly defer principal payment obligations for the period specified in the moratorium, being up to six months. During this period, clients must continue to pay interest, insurance premiums and any other amounts due under a loan agreement except for the principal loan amount.
Please note that this moratorium applies to loan agreements with fixed repayment schedules. The overall amount of client obligations under all loan agreements with the bank may not exceed five million euros. Clients whose obligations exceed this amount will be treated on a case-by-case basis.
The moratorium allows a single application for deferral of principal payments. If payment of loan principal has been deferred for a given client during the period between 12 March 2020 and the effective date of the moratorium, the bank may modify the deferral upon the client’s request, in accordance with the conditions of the moratorium. Commission fees for processing the moratorium only apply for the amount needed to prepare documentation for the agreement amendment.
The moratorium entitles a company to deferral of its loan principal payments if it has not had financial difficulties prior to 12 March 2020, and no insurmountable barriers exist to loan repayment.
A company may apply for moratorium relief if its equity at the end of the last complete fiscal year was positive, and no loan payments have been over 30 days in arrears since 12 March 2019. The client must state the reason why its financial standing has deteriorated due to the COVID-19 pandemic.
The moratorium does not apply to companies primarily engaged in gambling. The moratorium is not applicable to companies declared insolvent, bankrupt, or subject to legal protection procedures. Likewise, companies with which business relations have been terminated in accordance with money laundering, terrorism and proliferation financing prevention regulations or as part of international financial sanctions compliance are ineligible.
The moratorium takes effect on 5 May 2020 and remains in force until the Finance Latvia Association declares its discontinuation.