CFAs: Partial Interest Subsidy Scheme for Bank Loans to Band Clubs (Malta)

Deadline: 17-Nov-2026

The Arts Council Malta Partial Interest Subsidy Scheme helps local band clubs reduce the cost of approved bank borrowing for infrastructure, modernisation, and cultural activities. The Government of Malta subsidises 50% of the interest due on an eligible bank loan, calculated on a maximum loan amount of €500,000, for up to 10 consecutive years or the duration of the loan, whichever comes first. What Is the Partial Interest Subsidy Scheme? The scheme is designed specifically for local band clubs in Malta and aims to make bank financing more affordable. Support young people involved in music and performing arts. Continue providing cultural services to local communities. The scheme reduces the financial burden associated with borrowing while allowing band clubs to negotiate their own financing arrangements with banks. How Does the Interest Subsidy Work? Band clubs must first obtain an approved bank loan through a banking institution. Once the loan has been disbursed, Arts Council Malta, on behalf of the Government, subsidises 50% of the interest due on the loan. The subsidy is calculated using a maximum eligible loan amount of €500,000.

For example:

A €300,000 eligible loan can receive the subsidy based on the full €300,000. A €500,000 loan can receive the subsidy based on the full €500,000. A €600,000 loan may still qualify, but the subsidy is calculated only on the first €500,000. Therefore, borrowing above €500,000 does not increase the amount of the loan considered for the interest subsidy. How Long Is the Subsidy Available? The interest subsidy can apply throughout the loan period for a maximum of 10 consecutive years.

The subsidy ends when either:

The loan period ends, or 10 consecutive years have elapsed, whichever occurs first. What Is the Purpose of the Scheme? The scheme has several interconnected objectives. Infrastructure Investment Band clubs can use affordable financing to improve or develop their physical infrastructure. Modernisation The scheme encourages investment that helps band clubs modernise their facilities, operations, and cultural activities. Financial Sustainability Reducing interest costs can help clubs manage borrowing more sustainably and strengthen their long-term financial position. Cultural Preservation Band clubs play an important role in preserving local musical traditions, community identity, and Malta’s cultural heritage. Youth and Music Development Investment can also help clubs maintain opportunities for young musicians and support participation in music and performing arts. Who Is Eligible? The scheme is targeted exclusively at local band clubs. These clubs are generally voluntary community organisations that provide public value through their cultural and community activities. The scheme is intended to support their long-term sustainability and their ability to continue delivering cultural services. What Are the Financing Requirements? Band clubs are responsible for arranging their bank loans directly with financial institutions.

Applicants must:

Negotiate the loan directly with a banking institution. Complete the bank’s normal due diligence procedures. Obtain an approved loan. Ensure that the loan is disbursed before the interest subsidy intervention. Comply with the applicable requirements of the subsidy scheme. The Arts Council Malta does not replace the bank’s role in assessing the applicant’s creditworthiness. State Aid and Non-State Aid Options The scheme provides two distinct support options depending on whether the applicant’s activities constitute an economic activity under EU State aid rules. State Aid Option This option applies to undertakings carrying out an economic activity within the meaning of Article 107 of the Treaty on the Functioning of the European Union (TFEU). Support under this option is provided in accordance with the applicable de minimis Regulation. Non-State Aid Option This option is available where the applicant: Does not carry out an economic activity within the meaning of Article 107 TFEU, or Submits a proposal that does not involve an economic activity. The distinction is important because the applicable funding rules depend on the economic nature of the supported activity. How to Access the Interest Subsidy

Step 1: Identify the Investment Need

The band club should determine the infrastructure, modernisation, or cultural investment requiring financing.

Step 2: Approach a Banking Institution

The club must negotiate its loan directly with a bank and undergo the bank’s standard due diligence and approval procedures.

Step 3: Obtain the Bank Loan

The loan must be approved and disbursed in accordance with the applicable requirements.

Step 4: Determine the Applicable Aid Route

The applicant should establish whether the project falls under the State aid or non-State aid option.

Step 5: Apply the Interest Subsidy

Following loan disbursement, the Government, through Arts Council Malta, provides the applicable subsidy on interest due.

Step 6: Maintain Compliance

The band club should continue meeting all relevant financing and scheme requirements throughout the subsidy period. Key Financial Rules The most important financial conditions are:

Eligible loan amount for subsidy: Up to €500,000.

Interest subsidy: 50% of eligible interest due.

Maximum subsidy period: 10 consecutive years.

Loans above €500,000: May qualify, but only the first €500,000 is considered for subsidy calculations.

Bank financing: Must be negotiated directly by the band club with a banking institution.

Why It Matters Local band clubs are an important part of Malta’s community and cultural infrastructure. However, major infrastructure improvements and modernisation can require substantial borrowing. By subsidising half of the eligible interest cost, the scheme aims to make investment more affordable while helping band clubs preserve their cultural role. The initiative therefore connects cultural heritage preservation, community development, fi