October 15, 2020
coronavirus
step by step

Government launches new 18 billion Chilean peso program to reactivate micro and small enterprises

Government launches new 18 billion Chilean peso program to reactivate micro and small enterprises
The Reactívate Pyme: Vamos con todo (Reactivate SMEs: Full steam ahead) program will benefit more than 6,200 micro and small enterprises from all industries. The application process will open on October 16 on the sercotec.cl website.

In the Café Turkish in the middle of the Barrio Italia neighborhood, Women and Gender Equity Minister Mónica Zalaquett, together with Economy Undersecretary Esteban Carrasco and Technical Cooperation Service (Sercotec) National Director Bruno Trisotti, introduced the new emergency program Reactívate Pyme: Vamos con todo. This initiative will provide direct support to micro and small enterprises throughout the country.

At the event, the government officials shared the experience of entrepreneur Carol Pérez, owner of Café Turkish, who was awarded Sercotec’s Reactívate Turismo (reactivate tourism) subsidy a few months ago. This funding allowed her to keep her business open, set up deliveries during the quarantine in Santiago and therefore, offer her products on social networks.

“We know that the pandemic has affected women particularly hard, with many being the sole income earner for their families. Around 900,000 women in our country have lost their jobs. That is why we are grateful for the help being offered by Sercotec. It will provide much needed support to hundreds of women and help them move forward. I am certain that if we don’t want to mortgage our future growth, Chile’s economic recovery must focus on women,” stated Women and Gender Equity Minister Mónica Zalaquett.

Undersecretary Esteban Carrasco noted that, “the government is making a concerted effort to help micro and small enterprises recover and the Reactívate Pyme subsidy program is a prime example. This year, the Economy Ministry has allocated extra-budgetary funds so that Sercotec can provide additional emergency COVID-19 subsidies and thereby assist more entrepreneurs. In fact, in 2020, we will spend almost 50 billion Chilean pesos (US$62 million) and we forecast spending a similar amount with the same objective in 2021. I would also like to stress that next year we will allocate close to 5 billion Chilean pesos (US$6 million) solely for emergency subsidies to female-owned businesses, which will be carried out in conjunction with the Women and Gender Equity Ministry.”

Referring to this new program, Sercotec National Director Bruno Trisotti indicated that “we are working hard to revitalize the country and our SMEs, which are the engine of economic growth. That is why our goal is to use this new Reactívate Pyme program, which will award more than 18 billion Chilean pesos (US$22 million), to continue supporting micro and small enterprises, because together we can move forward. Under this program, beneficiaries can receive a subsidy of up to 3 million Chilean pesos (US$3,700) to reopen and reactivate their businesses. Our Chilean SMEs are a source of national pride.”

He added that “during the current year, Sercotec has implemented 70 programs, supporting more than 96,000 businesses, totaling close to 100 billion Chilean pesos (US$125 million). It should be noted that in a normal year, Sercotec assists around 3% of micro and small enterprises and this year we are set to reach 10%.”

This new initiative is part of the Paso a Paso, Chile Se Recupera (the Chile recovers step by step) plan. Its goal is to revitalize our country safely and gradually based on four pillars: work incentives, investment, support for SMEs, and simplification of permit application procedures.

What is Reactívate Pyme: Vamos con todo?

Applications for this new program can be submitted on the Sercotec website at www.sercotec.cl beginning at 12 noon on Tuesday, October 13 through until 6 pm on Friday, October 16.  Successful applicants for this competitive fund will receive up to 3 million Chilean pesos. The exact amount will be calculated according to the annual sales of each business, depending upon which bracket they fall into. Calculations will be based on the period from May 2019 until April 2020. 

  1. Bracket 1: Sales between 200 and 600 UF (inflation-indexed currency unit) (around US$7,200-US$21,500) may receive a subsidy of up to 1.5 million Chilean pesos.
  2. Bracket 2: Sales over 600 and up to 25,000 UF (US$21,500-US$896,000) may receive a subsidy of up to 3 million Chilean pesos.

This subsidy will finance working capital to cover items such as: supplies, goods and merchandise, rent, salaries, basic utilities and debt payments. Those who present documents showing expenses from March 18, 2020 onwards may be reimbursed.

In addition, the subsidy could be used to finance the acquisition of goods needed to implement COVID-19 related protocols, safety and health protection measures, which are essential for reactivating business. These include: partitions, disposable latex gloves, masks, hand sanitizer, aerosol disinfectants, disposable coveralls, etc. It also covers those elements needed to restart economic activities, such as: signs indicating maximum capacity for restaurants and stores, social distancing indicators, signs and other types of signage, setting up shopping carts on websites, implementing digital payment methods, delivery kits, digital marketing, educational health campaigns, etc.

How to apply for Reactívate Pyme: Vamos con todo?

The following steps must be followed in order to apply:

  1. Log on to www.sercotec.cl to register as a user or update information. Read the requirements for the Reactívate Pyme competitive fund.
  2. Complete the application form.
  3. Attach the Carpeta Tributaria (tax file) for requesting loans. This document is available at www.sii.cl and must contain form 29 (monthly tax declarations) for the required periods in order to calculate both the amount of sales and the decrease in sales. This document is required for every business that wishes to apply and must include current information and be in PDF format.
  4. The applicant must be a person and/or legal entity, from any economic sector, that initiated operations under the First Category Tax before April 30, 2019 and is actively operating at the time of the call for applications.In addition, companies must have cumulative net sales not less than 200 UF nor greater than 25,000 UF for the period between May 2019 and April 2020.
  5. The only companies that may apply are those that can demonstrate a decrease in sales of at least 30% when comparing sales between the following periods: May-June-July 2019 and May-June-July 2020.
  6. Businesses must legally reside in the region where they are applying or in an area targeted by the call for applications.
  7. Beneficiaries of the following programs are not eligible: Reactívate de Sercotec (Sercotec reactivate) (any type of financing), Renace Aysén (Aysén Reborn), Renace Gastronomía Aysén (Aysén Gastronomy Reborn), Programa Especial de Apoyos al Sector Gastronómico de la Región de Valparaíso (Special Program to Support the Gastronomy Sector in the Valparaíso Region) and FNDR-Programa Especial de Apoyo en la Reactivación de las Microempresas de la Región de Valparaíso (FNDR-Special Program to Support the Reactivation of Micro Enterprises in the Valparaíso Region). Beneficiaries of the Reactívate (reactivate) program launched in January 2020 may apply.