Portugal reinforces support for struggling businesses as they are told to close (again)

In the last few hours before the national lockdown comes slamming down, economy minister Pedro Siza Vieira announced ‘reinforced support’ for businesses that have been forced to close (many for a second time in less than a year), pledging that the second tranche of financing through Portugal’s ‘Apoiar’ (support) programme will be brought forward.

Various ‘non-refundable’ measures were presented. 

The bottom line is that the Apoiar programme is being ‘increased’ to take into account losses suffered in the 4th trimester of 2020.

Said Siza Vieira: “We are going to ask businesses to indicate their losses in the 4th trimester compared to 2019, and (we will) extend the limit for supporting losses”.

Businesses that are shut as a result of confinement will get the most funding, he stressed.

There will also be lump sum pay-outs to businesses that can show revenue fell by more than 25%.

Micro-businesses will qualify for €10,000, and they will “have the right to extra support of €2,500 for the first three months of this year”, writes Dinheiro Vivo.

Small businesses can receive up to €55,000 – to which €13,700 is added for this latest period of confinement.

Medium-sized businesses can apply for the maximum support of €135,000 in 2020, and will receive €33,750 to compensate for losses suffered during confinement.

Mr Siza Vieira gave an example during this evening’s press conference – shared with the minister of Culture who announced €42 million in grant aid for her sector. “A restaurant (small business) with a cashflow of €900,000 for 2019, and with a loss of 44.4% in 2020 (a loss of €100,000 per trimester), will now have the right to receive support of €55,000 as a result of this extended version of the Apoiar programme. In addition, and because of the new confinement in the first trimester of 2021, that company will also receive an extraordinary support payment of €13,750”.

Said the minister, the government’s Apoiar programme “is directed at businesses to compensate the losses of income for 2020 compared with 2019”, with limits depending on the size and cashflow of each company.

Applications for this support open next week (January 21) – and for self-employed people with simplified account (‘ empresários em nome individual com regime de contabilidade simplificada’) the government be will opening applications for lump-sum payments of €5000 from January 28.

Any businesses wanting the second tranche of their Apoiar support, can request it from January 18, adds Dinheiro Vivo.

Meantime, prime minister António Costa has been interviewed by TVI24, reiterating that Portugal is going through an “unparallelled and extremely deep economic crisis”.

The government “did everything it could” to avoid this new national lockdown, but now that the moment has arrived, there is little point pretending that it will be over ‘soon’. 

“I would say for sure that we will need this regime for a month”, he told the station this evening.

Hopes are pinned on confinement reducing the curve, on the vaccines protecting the vulnerable (and reducing the curve) and on the bazooka of EU funding starting to arrive and make a difference.

But none of it will be easy. “The perspectives in the foreseeable future are not encouraging”, he said. This is a collective challenge: “Either we face it together successfully or no-one gets through…” 

[email protected]