17.06.2020
OPPORTUNITIES IN BULGARIA AND THE LATEST FUNDING PROGRAMS
Each crisis provides unexpected opportunities for entrepreneurs - sectors and businesses, which until recently were on the periphery of the field of view of experts and investors, reported staggering growth during this period.
Opportunities for the enterprising:
Online business
It is difficult to identify a business that is not online at all. Many business sectors rely on their presence on the Internet and social networks to function. In the current situation, their inherent ability to quickly reorient and adapt has helped them shoot up and generate multiple growth in their customer base and revenue. Such are most companies providing services in online training, digital marketing and others. According to 'Business Matters'' magazine, sectors such as film and video streaming (eg Netflix) as well as video games are also growing.
The work from home, which many companies have introduced, has led to a legendary growth of video conferencing services such as "Zoom" and other similar platforms (Investopedia).
Home deliveries
Around the world, companies such as Amazon have been tested to the limit due to the increased demand for all kinds of goods and products and their delivery to customers' homes due to social distancing. In Bulgaria, online payments at eMag increased by 180%, FoodPanda - 170%, according to Forbes magazine. The adaptability of the Bulgarian entrepreneur was manifested in the catering sector - many restaurants and bars, even a large chain of confectioneries reoriented to home delivery, which not only survived but also strengthened its relationship with customers.
The sphere of services
Health services - yoga, fitness, etc. they left the halls and moved to social networks. Many instructors began to do classes in front of the camera for their followers. This undoubtedly leads to a number of advantages: instructors provide value, connect with more clients and strengthen their relationships with them.
The Bulgarian entrepreneur and the opportunities today
It is obvious that the flexible and fast will overcome this storm as well. In order to make the most of the opportunities that open up for business in today's atypical environment, funds are needed to finance innovative and adaptive business approaches.
Funding programs, especially from the EU, are often the subject of all sorts of speculation and misconceptions. Often the reason for this is their ignorance and / or misunderstanding, as well as vicious practices that have become the subject of media interest and criminal investigation. However, the opportunities provided by the programs should not be underestimated and should be used optimally to support business entrepreneurship. In general, funding programs are:
Grant programs
They have a longer implementation period (between 4 and 8 months from announcement to receipt of funds); require own participation from 30% to 65% of the project value; they are bound by strict requirements for the economic sector, the history of the enterprise and the way of investment. They are suitable for well-established businesses that can wait and want to make investments with a long horizon and lower returns.
The most current of them at the moment are:
BG05M9OP001-1.054 - SUPPORT FOR SUSTAINABLE BUSINESS - open until 31.03.2021. The applicants are: start-ups, social and self-employed persons, supported by operations under OPHRD 2014 - 2020 or by measures under the Employment Promotion Act. They can apply for amounts up to BGN 5,000 for services aimed at successful development of the enterprise;
BG16RFOP002-2.073 - Support for micro and small enterprises to overcome the economic consequences of the COVID-19 pandemic - the most current support procedure. Applicants must be a micro or small enterprise with economic activity in 2019, with reported at least BGN 30,000 "net sales revenue" in the Annual Tax Return for 2019, to have a registered decrease of at least 20% in turnover for the month of April 2020 compared to the average monthly turnover in 2019, as well as as of December 31, 2019 not to be in difficulty. In this case, they can apply for up to 10% of the turnover in 2019, but not less than BGN 3,000 and not more than BGN 10,000.
Digitalization of small and medium enterprises - an upcoming program with funding of up to 70% of the project value. Applicants must have completed three financial years, be traders or cooperatives and have realized a certain minimum of net sales revenue according to their category (micro, small, medium) in the economic sectors defined by the procedure. They can apply for grants from BGN 50,000 to 391,166 with projects for development of management capacity through the use of information and communication technologies and services.
Voucher scheme for the provision of information and communication technology services (ICT services) to micro, small and medium-sized enterprises (SMEs) - aimed at facilitating access to digital know-how and technology and thus promoting the use of new ICT-based businesses models and to intensify the digitalization of SMEs, which will contribute to the development of their business. The requirements for the candidates are similar to those of the previous procedure. Businesses can apply for a type 1 voucher - for websites and mobile applications - worth up to BGN 5,000; or for a type 2 voucher - for ICT services for digital marketing, process optimization and / or providing cyber and information security worth BGN 20,000. The procedure is forthcoming.
Financial instruments
They are specialized funding schemes co-financed by EU funds, the national budget and additional borrowings from the private and public sectors. They are aimed at projects that could potentially become self-sustaining, provide investment support through loans, guarantees or equity participation. In Bulgaria they are managed by the „Fund Manager of Financial Instruments in Bulgaria“ EAD. It contains the financial instruments of four of the operational programs, as of interest to the Bulgarian entrepreneur are:
Under the Operational Program "Innovation and Competitiveness" 2014-2020:
- “Innovation Accelerator Bulgaria“ AD Acceleration and Initial Funding Fund with a budget of BGN 30.5 million, aimed at innovative business ideas in the fields of healthcare, education, care for the elderly, transport and logistics, light industry, digitalization and etc.
- Venture Capital Fund New Vision 3 with a budget of BGN 53.4 million stimulates high-tech companies with a strong team and a proven business model.
- „Morningside Hill“ OOD Venture Capital Fund with a budget of BGN 67 million for investments in high-tech companies in the field of production of goods using new technologies that allow reducing unit costs; high technology, software and hardware; e-commerce; products or services introduced in other countries but not yet present in the region, etc.
Under the Operational Program "Human Resources Development" 2014-2020:
- Microcredit with shared risk - provided by three investment intermediaries - SiS Credit AD, „Microfund“ AD and First Investment Bank AD/ Fibank. The provided loans amount to BGN 5,000 to BGN 48,895, and the repayment period of the loans is up to 10 years with the possibility of a 2-year grace period and are used for acquisition of assets, working capital for development and expansion of the activity, training and others.
For starters: Venture capital and crowdfunding
The programs and financial instruments described above require a Bulgarian entrepreneur to have come a long way to take advantage of them - to have established business and experience in developing ideas and products, as well as sales already realized. However, if you have a brilliant idea and a strong team, you can contact various private venture capital funds and apply with a short but strong presentation.
You can also seek support from the countless internet crowd and attract crowdfunding on platforms such as kickstarter.com and indiegogo.com.
If you are interested in the topic, you can read this or visit the site crowd.bg or the cleantech.bg platform.
