Scheme Overview
The SME Guarantee Scheme (SGS) helps businesses, including startups, get financing to grow.
MDB provides an 80% guarantee on the loan amount to commercial banks. This means SMEs can benefit from lower interest rates, lower upfront contributions, and reduced collateral requirements.
Loan amount between €10,000 and €1,000,000.
Maximum term of 10 years.
What can the MDB SGS Business Loan cover?
- New investments
- Realisation of new projects, penetration into new markets or new developments
- Capital expansions
- Investment-related working capital
Applications are to be made with the accredited banks: APS, BOV and HSBC.
Terms & Conditions
| Product Name | SME Guarantee Scheme |
| Objective | To enhance access to bank financing for SMEs that, in spite of having viable projects, are unable to access the required bank finance for various reasons. The scheme addresses the following barriers to lending: (i) inadequate collateral; (ii) lack of credit history; and (iii) novel business market, sector or technology that is perceived by finance providers as higher risk under current credit risk evaluation practices. |
| Structure | The MDB provides an uncapped guarantee of 80% on the loan portfolio of the financial intermediary. The scheme will be open to all accredited credit institutions. |
| Portfolio Volume | €80,000,000 (to be allocated among accredited credit institutions on a first come first served basis). |
| Last date for inclusion of loans under the scheme | 31/12/2027 |
| Term of Loan | Maximum 10 years. |
| Moratorium | Maximum 12 months from first disbursement date (at the start of the repayment period). A longer moratorium, but not exceeding 24 months, may be granted on a case-by-case basis subject to MDB approval. |
| Size of Loan | Facilities of €10,000 up to €1,000,000, The minimum loan size may vary from one financial intermediary to another. |
| Security | Take up of collateral is restricted to a maximum of 20% at portfolio level. |
| State Aid Regime | De Minimis. |
| Loan eligibility | The purpose of the financing covers a wide spectrum of possible activities including: ▪ the establishment of new enterprises, ▪ expansion capital, ▪ capital for the strengthening and/or stabilisation of the general activities of an enterprise, ▪ the realisation of new projects, penetration of new markets or new developments by existing enterprises, ▪ investment-related working capital, ▪ business ownership transfers, in whole or in part, as long as this does not create or enhance a position of significant market dominance, conforming with applicable legislation (including but not limited to S.L 379.08). |
| Eligible applicants | The scheme is open to all SMEs in all economic sectors except the excluded and prohibited activities of the MDB and the EIF. Furthermore, SMEs active in sectors specifically excluded in Article 1 of the de minimis Regulation, are ineligible. |
| Restricted and Prohibited Activities | Click here for the full list, found in Annex 1 of the Incentive Guidelines document. |
| Benefits | Besides accessing finance not otherwise available, eligible SMEs benefit from: a longer repayment period, lower collateral requirements and lower interest rates as a result of the credit risk protection from the MDB’s guarantee. |
| Accredited credit institutions | APS Bank Bank of Valletta HSBC Bank Malta |
All relevant details and documentation for intermediaries can be found below.