Put Andre Jerusalem and Marcos Buzo – 07/04/2020
The National Monetary Council (“CMN”) through Resolution No. 4,800, published on April 7, 2020, regulates and authorizes financial institutions to participate in the Emergency Employment Support Program, established by Provisional Measure 944, of April 3, 2020.
Financial institutions participating in the program may finance companies with revenues between R$360,000.00 (three hundred and sixty thousand reais) and R$10,000,000.00 (ten million reais) per year, with the credit line being limited to a period of 2 (two) months' wages and a maximum amount of 2 (two) minimum wages per employee.
Therefore, a company with 50 (fifty) employees will be able to hire for the amount of 200 minimum wages to maintain jobs.
At the same time, financial institutions must offer credit in the following form: (i) interest rate of 3.75% (three point seventy-five percent) per year; (ii) total term of 36 (thirty-six) months; and (iii) 6 (six) months grace period.
There is a list of mandatory documents that must be submitted to apply for the credit, among which we highlight: exemption from presentation, by participating companies, of a Certificate of Regularity of the Severance Pay Fund (FGTS), of the Certificate of No Debt (CND), of prior consultation with (Cadin) and of proof of payment of the Tax on Rural Territorial Property (ITR), among other legal requirements. However, a Certificate of No Debt with the National Institute of Social Security (INSS) will be required and the financial institutions participating in the Program may consider possible restrictions in credit protection systems on the date of contracting and records of default in the credit information system maintained by the Central Bank of Brazil in the six months prior to contracting.
From the point of view of financial institutions, the Union will fund, via the National Bank for Economic and Social Development, 85% (eighty-five percent) of the amount disbursed to finance the program, with only 15% (fifteen percent) coming from resources from private institutions.
Our office is at your disposal to assist you in negotiations with financial institutions.