The Federation of Thai Industries (FTI) plans to ask the Bank of Thailand to extend the debt moratorium scheme, which will end next month, for another two years.
The extension would require businesses to pay 10% of interest payments for six months to alleviate the fear of non-performing loans (NPLs) among financial institutions.
Borrowers should also be charged a normal interest rate, not applying penalties for overdue payments, the FTI said.
The group believes that this measure will keep the NPL rate at a manageable level and at the same time help staggering businesses that cannot afford to pay their debts, said FTI chairman Supant Mongkolsuthree.
He was preparing to pitch the proposal at today's meeting of the Center for Economic Situation Administration.
Many small and medium-sized enterprises risk shutting down permanently this year because they cannot generate enough revenue to service their debt. Without an extended debt relief programme they will struggle to survive, Mr Supant said.
The Thai economy will not fully recover in the short term, so businesses badly need the government's help, the FTI said.
The spread of Covid-19, which continues to affect a number of countries, is likely to linger for at least a few years until a vaccine is globally available, said FTI vice-chairman Kriangkrai Tiannukul.
"The debt relief measure is needed for two years to help businesses better cope with the Covid-19 impact," he said. "It will also enable companies to retain their employees."