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The Finance Latvia Association extends the application deadline for moratorium for businesses to 19 June


The Finance Latvia Association has extended the application deadline for the moratorium for businesses (“Moratorium”) until 19 June, whilst financial institutions must decide on the application until 30 June.

The FLA announced Moratorium on 5 May 2020 to support clients that are experiencing short-term financial difficulties as a result of the restriction implemented in response to Covid-19. Any credit institution or its subsidiary operating in Latvia may join the Moratorium, which can be applied to loans and/or leasing based on the decision of the financial institution.

So far Swedbank, Luminor, SEB banka, BlueOrgange Bank, Industra Bank, Reģionālā investīciju banka, Baltic International Bank, PrivatBank, Signet Bank, LPB Bank and OP Bank have applied the moratorium to both service types, while Citadele, Expobak and Altum have applied it only to loans.

Moratorium applies to legal persons and other entities involved in economic activity, except self- employed individuals. Moratorium changes the repayment schedule of the principal if the loan agreement stipulates the repayment of the principal in instalments. The client may choose to defer the repayment of the principal partially or fully once for up to six months, during which the client continues to pay interest, insurance premiums and other payments stated in the loan agreement which are not the principal. Furthermore, financial institutions may not ask for additional collateral or increase the interest rate.

A company must fulfil the following cumulative criteria to be eligible for Moratorium:

  • the loan was issued before the announcement of the Moratorium;
  • the company’s own capital was positive at the end of the previous financial year;
  • The total sum of the client’s and related parties’ obligations in accordance with all loan agreements within one financial institution must not exceed five million Euro;
  • loan repayments were not overdue for more than 30 days within the past year from March 12th, 2019
  • the client’s financial standing has worsened due to the COVID-19 pandemic;
  • The client can submit documentation evidencing its resolution to refrain from making any payments to its shareholders, related persons, owners and/or persons related to them (including dividends, loans or loan repayment to said persons) during the deferral period of the repayment of principal and 6 months after its expiry.

Moratorium may not be applied if:

  • the company’s main business is gambling;
  • the company is insolvent, bankrupt or who have gone into administration;

business relations with the company have been terminated in accordance with prevention of money laundering and terrorism and proliferation financing laws or international targeted financial sanctions.

For more information on how to apply for the moratorium, contact your financial institution or COBALT Banking and Finance Senior Associate Inga Tenisa: In most cases, you will be able to submit an application via internet bank.