06.10.2020

They give money to companies under two new support measures

By the end of this month, two new business support procedures are expected to be announced due to the coronavirus crisis under the Operational Program "Innovation and Competitiveness" from its available budget.

This was announced by Iliana Ilieva - Director General and Head of the Managing Authority of the Operational Program "Innovation and Competitiveness" during an online forum dedicated to financial measures to support business, set in the conditions of COVID-19. The two procedures have a budget of BGN 78 million, BTA reports.

The criteria and methodology for evaluation under the two new procedures were discussed at a meeting of the Program Monitoring Committee on 17 September. The full package of documents under the two public discussion procedures is expected to be announced by the end of this week, followed by their official announcement for application. Work is also underway to amend the EU Funds Management Act, which will be able to open the procedure for simplified rules for evaluation and application for shortened deadlines.

The first procedure is to provide operating funds for small businesses with a turnover in 2019 of at least BGN 500,000, as the parameters are to be submitted for public discussion and may change if the proposals do not contradict the regulations and legislation.

Eligible for the procedure will be small enterprises with at least two completed financial years, with a turnover of at least BGN 500,000 in 2019. The funds that will be eligible are to overcome the shortage of funds or lack of liquidity caused by the coronavirus. The costs will be for working capital and to cover current needs, costs for raw materials, fuels, labor, wages and more. The indicative announcement of the procedure is at the end of this month, and this will depend on how quickly the change of the relevant law will be made. There is an assurance from the EC that the temporary framework under which this procedure is expected to start - by the end of the month, will be extended either until mid-2021 or until the end of next year. This will ensure that the funds can be paid to all companies in need also in a short time, the expert said.

The other procedure is to provide support to small and medium-sized enterprises for reorganization and adaptation of jobs and / or changes in business processes and models in the context of COVID-19. All enterprises - micro, small and medium - sized will be eligible here, as the envisaged support regime is minimal aid, and the enterprises must have one completed financial year - 2019, and have carried out economic activity in the same year.

There is no set minimum turnover. The activities that will be supported are related to the creation of unsafe working conditions and to the adaptation of work in the conditions of COVID-19. Thus, costs for fixed and non-current assets will be eligible, including light current construction and installation repairs for adaptation of work premises and for costs for materials and consumables for collective protective equipment for protection, sanitation and disinfection, reorganization and adaptation of work processes, such as this includes digitization.

In connection with the expected to reach the business within the next month or two funds from the EC through REACT-EU, Ms. Iliana Ilieva announced that it is planned to announce two measures with a total budget of approximately BGN 400 million.

The first is for recovery and growth, and eligible applicants will be all SMEs from all sectors with three completed financial years, the last being 2019. Activities related to productive investments are eligible to overcome the difficulties associated with old technologies, high costs and low quality of products or services.

Eligible costs will be to finance productive investments and working capital funds will be provided, and these funds will probably be limited to some amount, as the purpose of this procedure is to emphasize investment costs.

The other procedure will be for digital and "green" innovations, as it is eligible for all SMEs from all sectors that have three completed financial years and again the last is 2019. Eligible activities will be: reconfiguration of business processes and models, including through digitalisation, the use of new alternative materials, the improvement of waste management, the improvement of the characteristics of products and services from the point of view of the circular economy. Eligible costs are for financing fixed assets and services.

An additional measure, which is outside the Operational Program "Innovation and Competitiveness", but in support of SMEs, is through the "recycled" funds under the initiative "JEREMY". The expert reminded that with these funds a new debt instrument was created, which is managed by the European Investment Fund, and under an agreement between the Ministry of Economy and the European Investment Fund, a guarantee instrument is implemented to protect credit risk in debt financing in the form of letters of credit, bank guarantees, factoring and other short-term credit operations in support of the commercial activity of SMEs and medium-sized enterprises.

Under the instrument, the total amount of the guarantee, which is covered by the European Investment Fund, is BGN 160 million, as the possibility for the total portfolio of this guarantee instrument is BGN 800 million, and in case of great interest - it can increase to BGN 1.2 billion. leva. The maximum loan amount for the final recipients is up to EUR 3 million for working capital and multi-purpose needs under facilitated conditions.

The amount of the guarantee, which is covered per final recipient, is 80 percent, and the period in which companies will be able to take advantage of this type of guarantee instrument and receive loans is 36 months. The maximum loan repayment period is no more than five years. So far, three banks have expressed interest, the expert said, adding that they will soon sign an agreement with the European Investment Fund and start providing loans. The EIF also assured interest from two other banks.