Granting of a guarantee quota
On the proposal of PMV, the Flemish Minister of Economy launches a call on a regular basis (at least once a year) to find out which financial institutions are interested in receiving a government guarantee. A guarantee quota is allocated by the minister to those institutions that respond to the call and meet the specified conditions.
The financial institutions granted a guarantee quota are referred to as ‘guarantors’. Each guarantee holder enters into a framework agreement with PMV prior to granting guarantees. This framework agreement contains the agreements between the parties on the further implementation of the guarantee scheme.
Notification of guarantees
Guarantors can notify a guarantee within the regulatory framework up to a maximum of 75% of the loan amount.
After notification, PMV registers the guarantee and the guarantor is requested to pay the premium.
After payment of the premium, the guarantee period begins to run.
For guarantee amounts above EUR 750,000 and up to EUR 1.5 million, the credit file and the guarantee application will be examined before registration. On the advice of the PMV, the competent minister grants or does not grant the guarantee or sets additional conditions.
Calling a guarantee
In the event of default by the borrower and the guaranteed credits becoming due, the guarantor may call in the guarantee. Provided the file meets the legal conditions, PMV will proceed with payment of the guaranteed amount (maximum 75% of the theoretical outstanding capital, plus up to one year of overdue capital and overdue interest).
The guarantor remains responsible for recovering the credit file, inter alia through cashing existing collateral (mortgages, commercial cases, pledges receivables, guarantees, etc.). The recoveries must be passed on to PMV according to a distribution key.
The distribution key is calculated on the basis of the ratio between the intervention paid by PMV and the total eligible debit balance at termination.
