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The EU executive, tasked with ensuring a level playing field in the 27-country bloc, said an extension would help EU countries address the investment gap that some companies face due to the COVID-19 pandemic.
It said small and medium-sized enterprises (SMEs) and small mid-caps typically rely on bank loan financing and may be even more indebted after the crisis.
The Commission also proposed extending existing measures approved under the looser state aid rules regime to June next year. A final decision will be taken once EU countries provide feedback to the proposals.
The rules, which make it illegal for EU governments to give some companies an unfair advantage, were loosened in March last year due to the pandemic.
