CMF relaxes requirements to access loans guaranteed by Fogape

The Commission for the Financial Market (CMF) reported that its Council approved updating the Administration Regulation of the Guarantee Fund for Small and Medium Entrepreneurs (FOGAPE).
Making use of the powers given to it by Article 1 of Decree Law No. 3,472, the Objective of the Commission is to permanently incorporate into the traditional FOGAPE Program several of the flexibilizations that were created for the FOGAPE Reactivation Program initiated by the health crisis due to Covid 19, and that were in force until December 31, 2021.
The main built-in elements are:

The way in which the annual sales of companies eligible to access the Fund’s guarantees are measured is made more flexible; as well as the power of the Fund Administrator (Banco Estado) to establish in the bidding rules the conditions for estimating the sales of those companies that have not started activities or that have not yet completed 12 months of activity.
It is established that the representative title of the financing must contain a statement from the debtor indicating the destination that will be given to the funds and the responsibility that it assumes in case of delivering false information in its application or giving the resources a use different from those declared.
It also establishes the responsibility of financial institutions with respect to defining the criteria for granting and subsequent monitoring of the debtor during the contractual relationship.
The conditions for financial institutions to request the payment of the Fund’s guarantee in case of default of the debtor are relaxed: a longer filing period with fogape (from 425 to 500 days) and the possibility of requiring such payment from the beginning of the judicial collection, for operations under 400 UF (prior entry of the collection claim to the competent court).
Additionally, a transitional provision is incorporated that extends the period of collection of the guarantees of the Fund, for those entities that could not notify the debtor during the validity of the state of constitutional emergency of catastrophe, due to public calamity, declared by Supreme Decree No. 104, of March 18, 2020, of the Ministry of the Interior and Public Security, and its extensions.

It should be stressed that the adjustments that it was possible to incorporate into the Regulation are limited to those that fall within the scope of the commission’s competences.
These measures seek to facilitate the conditions for the granting of financing guaranteed by Fogape and, at the same time, to safeguard an adequate management of the credit risk of the institutions that benefit from these guarantees.
These new provisions apply to future tenders by the Fund Administrator.

Original source in Spanish