Government and Private Sector Boost Entrepreneurs

Businesses of all sizes face a tough time ahead now that COVID-19 is straining the economy. Nonetheless, to weather the storm, several options are at hand to help entrepreneurs give their company a boost in these trying times.

Mexico is officially still in Phase 2 of the pandemic. However, neither government nor private sector are turning a blind eye to the plight of the entrepreneur. This means there are several options available to help these players to come out successfully from this crisis.

One significant promise comes directly from President López Obrador. El Universal reported that he promised to bail out the poor instead of big companies. Smaller companies were relieved to hear that they are included in plans to boost the economy. Plans include backing up low-interest loans. The Financial Times, however, reported that these measures are not perfect. One interviewee raised the point they would rather see a tax break, but SAT has urged companies to pay their taxes so the government can buy necessary equipment such as ventilators in its fight against the virus.

Another initiative to latch onto comes from banks. BBVA already announced in a press release that it would provide loans for MSEs and provide deferral of payments up to 90 days to companies struggling to pay salaries. Although these measures are not available in Mexico as of yet, Mexicans can benefit from a four-month deferral for payments on mortgages, personal loans, credit cards and car loans.

New players are entering the market with solutions as well. Tech-enabled lender Credijusto comes from Mexico and freed up a significant debt facility totaling US$100 million. This enables the Fintech startup to provide capital for Mexican MSEs, providing them with another option to keep operations running, as well as broadening the startup’s own market.