Nine Banks Interested in the Fund of Funds’ New Recovery Programme Facility
The funds are made available under Operational Programme Innovation and Competitiveness 2014—2020, in the framework of REACT-EU, since due to the high interest, the initial envelop was quickly committed.
Nine credit institutions have applied to take part in the new call for selection of partner banks to implement the financial instrument. The additional resources to be provided as a guarantee cover by the Fund of Funds total BGN 96 170 000, well below the total amount in which the banks have expressed interest.
The Recovery Programme facilitates the efforts of viable companies to continue to develop. The terms of the guarantee enable swift lending, with minimal administrative burden and no security pledging requirement.
The Fund of Funds will assume up to 50 % of the partner banks credit risk in their new portfolios of loans to small and medium-sized enterprises (SMEs), providing an 80 % guarantee cover per loan.
The key advantages of the Recovery Programme are:
- Access to business credit for eligible Bulgarian SMEs with a track-record of at least three years;
- No requirement to set up security; unsecured credit, save for personal guarantees pledged by the owners;
- Fast-track approval procedures and the opportunity for swift disbursal;
- Possibility to negotiate a 12-month grace period;
- Possibility to extend the repayment period for the principal amount to up to 84 months;
- Minimal administrative burden for the client;
- Possibility to borrow up to BGN 3 million and finance up to 70 % of the 2019 or 2020 turnover, whichever is higher, up to the de-minimis ceiling.