Put Marcos Francisco Vilas Boas Buzo and Andre Jerusalem – 21/5/2020 

On May 18, 2020, Law No. 13,999/2020 was enacted, which established the National Program to Support Micro and Small Businesses (“Pronampe”). The purpose of this program is to guarantee credit to smaller companies (the majority in the country) with financial institutions, since it was found that small and medium-sized companies have difficulty obtaining emergency financing due to the pandemic. The credit line must be up to 30% (thirty percent) of the annual gross revenue, calculated based on the 2019 fiscal year, except for companies that have been operating for less than 1 (one) year, in which case they may choose financing based on 50% (fifty percent) of the share capital or 30% (thirty percent) of the average monthly revenue since the beginning of their activities, and must choose whichever is considered more advantageous. The funds from Pronampe may be used by companies to finance their activities, investments and working capital, and participating financial institutions must enter into a contract with a Selic rate plus 1.25% (one and twenty-five hundredths percent) on the amount granted and a term of 36 (thirty-six) months for payment. When granting credit, a guarantee of 100% (one hundred percent) of the loan amount must be provided, and in the case of companies that have been in operation for less than one year, this guarantee may be up to 150% (one hundred and fifty percent) of the amount borrowed. When sanctioning the law, the president vetoed an article that guaranteed an 8 (eight) month grace period for payment of loan installments. However, according to information published in the press, there is a good chance that the National Congress will overturn the veto and the grace period will be instituted. Our office is available to assist in negotiating with financial institutions in order to obtain such financing.