State aid: Commission approves UK subordinated loan scheme of up to approximately €16 million to support Scottish businesses affected by coronavirus outbreak

© European Union, 2021, Source: EC - Audiovisual Service© European Union, 2021, Source: EC - Audiovisual Service

The European Commission has approved a UK scheme of up to GBP 15 million (approximately €16 million) to support companies in Scotland that are affected by the coronavirus outbreak. The measure was approved under the State aid Temporary Framework. The public support, which will take the form of subordinated loans with subsidised interest rates, will be accessible to small and medium-sized enterprises (SMEs) and large companies in Scotland which have been negatively impacted by the coronavirus outbreak. The aim of the measure is to help companies address the liquidity shortages they face and enhance their access to financing, thus helping them continue their activities during and after the outbreak. The Commission found that the UK measure is in line with the conditions set out in the Temporary Framework. In particular, the subordinated loans (i) relate to investment and/or working capital needs of the beneficiaries in the near future; (i) they will be issued by 31 December 2020; and (iii) have a maximum maturity of six years. Furthermore, the annual interest rates of the loans respect the minimum levels foreseen by the Temporary Framework. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of the UK, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules. The non-confidential version of the decision will be made available under the case number SA.58205 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. More information on the temporary framework and other action the Commission has taken to address the economic impact of the coronavirus pandemic can be found here.