Loan repayment holidays announced for mobilised SME owners with their details clarified for all SMO participants
Mobilised owners of limited liability companies (LLC) will be entitled to suspend repayments on their business loans provided they are both the sole founders and executive directors of such companies, with the latter listed in the SME register. An additional condition states that the information on founders and executives has not been changed in the Unified State Register of Legal Entities since 21 September 2022.
The relevant law has been passed by the State Duma.
An application for loan repayment holidays (grace period) may be submitted by both LLC founders and persons acting by proxy. Loan repayment holidays start from the application date or an earlier date indicated by the applicant but not before 21 September 2022. They may be applicable to any loans issued to the LLC before its founder was mobilised. After the end of mobilisation, the term of loan repayment holidays will be extended by 90 days.
During the grace period, interest continues to accrue at the rate set in the agreement. After the agreement expires, outstanding interest will be included in the principal, and the loan maturity will be extended so that the frequency and amount of payments remain the same.
The new law introduces a number of clarifications to the procedure for granting loan repayment holidays to all participants in the special military operation (SMO) set by the law of 7 October 2022:
— after the end of mobilisation or borrowers’ participation in the SMO, the term of loan repayment holidays may be extended for the period while the participant in the SMO is recognised as missing;
— the Russian government now is empowered to limit the maximum amount of a business loan, which is subject to write-off if the serviceman was killed or recognised as a disabled person of group I;
— the procedure for confirming their right to loan repayment holidays will change: lenders may request information about borrowers’ mobilisation or their participation in the SMO from the Federal Tax Service that will receive relevant information from the Ministry of Defence (this rule will become effective on 23 November 2022).