Bulgaria's Fund of Funds (FoF) said it offered all local banks the opportunity to apply for fresh financing in the amount of 96.2 million levs ($57.0 million/49.2 million euro) under the country's Recovery Programme.
The programme is a portfolio guarantee to enable banks in the country to accelerate the provision of new loans in support local enterprises and their recovery from the coronavirus crisis.
The funds will be made available under EU's operational programme Innovation and Competitiveness 2014-2020 as part of the bloc's response to the COVID-19 pandemic under the REACT-EU Priority Axis 6 Recovery of SMEs, the state-owned fund said in a statement on Monday.
The aim is to facilitate the access of businesses to recovery loans. Businesses will be able to access fresh financing, mainly to cover their current liquidity needs, to funds for new investments, transformation and growth. The terms and conditions of the guarantee ensure that loans can be disbursed within short timeframes, with a minimal administrative burden and without the need for material collateral, the FoF said.
The FoF also said that it will underwrite up to 50 % of the partner banks' credit risk arising from the SME loan portfolio created by each bank, covering 80% of each individual loan extended under the Guarantee Facility.
Companies eligible for support under the programme are local SMEs with a history of at least three years. They will be able to receive financing of up to 3 million levs, but not exceeding 70% of their turnover for 2019 or 2020, whichever is higher up to the de minimis threshold for state aid, according to the statement. All financial institutions with a valid banking license and lending authorisation may participate in the selection of partners for the disbursement of the additional financing available from the FoF until October 25.
The main activity of FoF is the structuring and management of financial instruments co-financed by the European Structural and Investment Funds during the 2014-2020 programming period.