The coronavirus highlighted the difficulty for Brazilian companies to access credit lines and it’s even harder for small businesses, which have short working capital to keep the business running, as pointed out by Gazeta do Povo, citing a FGV (Getúlio Vargas Foundation) and Sebrae (Brazilian Micro and Small Business Support Service) research. It estimates that micro and small companies need an additional $38 billion (BRL 200 billion) to survive the pandemic crisis.
In Brazil, there are 17.3 million enterprises among individual micro-entrepreneurs, which earn up to BRL 81,000 per year; micro-enterprises, with revenues of up to BRL 360,000 per year; and small businesses, which earn up to BRL 4.8 million per year. Together, the three categories add up to BRL 3.52 trillion in annual revenue.
Today, the Brazilian Central Bank announced the Working Capital for Business Preservation (CGPE), a line of loans directed to micro, small and medium-sized companies. The measure has a credit potential of $24.7 billion (BRL 127 billion), according to the Central Bank, and is complementary to the programs already implemented by the government. The deadline for operations is until December 31, as reported by Valor Econômico. This working capital modality provides for a grace period of six months and a minimum term sheet of three years.