A decision affecting many people facing financial hardship due to the coronavirus pandemic has been published in the Official Gazette and is now in effect. To provide relief for tradespeople and craftsmen who suffered economic losses, low-interest bank loan payments will be postponed for three months.
3-Month Loan Postponement
Businesses that experienced economic damage because of the coronavirus outbreak can request loan postponement from banks to help offset their losses. A recent decision published in the Official Gazette grants a three-month postponement for low-interest loans provided by Halkbank, aimed primarily at tradespeople and craftsmen who were heavily affected by the pandemic. The Ministry of Treasury and Finance will implement the provisions and oversee the application of this decision.
There are specific conditions for businesses to qualify for the postponement. Businesses requesting a loan deferral must not lay off any employees during the period covered by the measure. They must also commit that they will not dismiss workers during the subsequent relevant dates. If a business makes this commitment but later dismisses an employee, the loan postponement will be declared invalid.
Conditions for Loan Postponement
Businesses applying for loan postponement must meet certain requirements, including the following:
- Effective from August 1;
- The postponement applies to loans taken from institutions associated with the Union of Turkish Tradesmen and Craftsmen Credit and Guarantee Cooperatives Central Union (TESKOMB) regional unions, to tradespeople and craftsmen whose businesses were damaged by the pandemic, and to loans provided either with the guarantee of credit and guarantee cooperatives or directly by Halkbank.
- If loan payment terms fall due between July 1 and September 30, 2020, and the debt has not been settled as of July 1, it is possible to defer repayment for three months with interest applied.
- The original maturity terms set at the time the loan was taken remain unchanged. No installments are paid during the deferment period.
- No default or collection proceedings will be initiated during the deferment, and the deferment does not alter collateral or personal guarantee arrangements.
- Guarantors do not have the right to withdraw their guarantees during the deferment period.
- Income losses incurred during the deferment will be covered by the Ministry of Treasury and Finance.
- Businesses that defer their debts may still apply to Halkbank for personal or working capital loans if they request them. Deferment does not automatically prevent new loan applications.
- Interest that accrues during the deferment, along with remaining installments, will be added to the outstanding balance and distributed across the remaining payments in equal amounts, in accordance with banking and insurance procedures.
- Businesses that request postponement may not lay off employees during the deferment. If the number of employees decreases (except where an employee departs voluntarily), the business will be excluded from the deferment program.
Which Banks Offer Loan Postponement?
In addition to Halkbank, several other banks are offering debt deferral options for tradespeople and craftsmen during the pandemic. These include Yapı Kredi, QNB Finansbank, İş Bankası, TEB, Denizbank, Kuveyt Türk, Eximbank, Şekerbank, Odea Bank, Alternatif Bank, Albaraka Türk, Türkiye Finans, Ziraat Katılım and Vakıfbank. However, the duration and terms of deferral vary by bank. Non-state banks may apply interest to the postponed principal and may impose conditions that differ from public banks. Some banks may also restrict additional borrowing during the deferment period. Deferment lengths and conditions therefore depend on each bank’s policies.