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Growth plan is good news for Danish companies

8 May 2014

The Danish government’s growth proposal is going in the right direction. The Danish Bankers Association finds particularly the change in the tax rules for capital income positive, because it will help companies when they go to the bank and apply for loans.

There are positive trends in the Danish government's recently published proposal for the upcoming growth package, the Danish Bankers Association believes.

"The government’s proposal about a reduction of the dividend tax on unlisted shares is a much needed helping hand to the country's small businesses. It will strengthen investors' incentive to put money into small businesses. Therefore, a lower dividend tax could help the solidity of the companies, which since the crisis has been badly hit,"says Deputy Chief Executive at the Danish Bankers Association Louise C. Mogensen.

Therefore, the Danish Bankers Association also supports the government's proposal on the new deduction system for investors in small businesses. 

Strengthens businesses’ standing in the bank

The Danish Bankers Association has recently highlighted the need for more risk capital in the companies, not least of which is intended to attract more capital from i.e. the bank to finance investments.

"A strengthening of companies' access to equity not only provides the direct effect on investment opportunities, but also an additional effect, which is derived from improved loan options," explains Louise C. Mogensen. 

Rather Growth guarantee than Growth loan

The Danish Bankers Association is also supportive of the fact that the Growth Fund, jointly with the banks, will be able to fund even more SMEs that cannot provide sufficient security.

"We agree with the Government that the Growth Fund should have better opportunities to help SMEs with financing. But rather than an extension of the Growth loan scheme we had, we would, however, have preferred an extension of the scheme for the current small Growth guarantees and a reintroduction of the large Growth guarantees. Growth guarantees are more flexible product and thus less administratively hard to use, "says Louise Mogensen.

Fewer cash payments are a common good

Also, the Danish Bankers Association supports the proposal - on a trial basis –saying that stores can refuse cash payments. This will help prevent crime, partly because it reduces the possibility of store robberies, and cash handling also has higher social costs than other payment methods.

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