ECONOMY

Funds target SME recovery

Funds target SME recovery

Small and medium-sized enterprises will received the lion’s share – 85% – of the loans to be disbursed through the second phase of the funding program by the Guarantee Fund, expected to begin in early October.

The eligibility condition for companies is that they should not have received any bank loans through the two programs activated to date for tackling the consequences of the crisis by the Entrepreneurship Fund II (TEPIX II) and the Guarantee Fund.

That is the decision that Deputy Development Minister Yiannis Tsakiris and the chief executive officer of the Hellenic Development Bank, Athina Hatzipetrou, made on Tuesday following the recommendation by commercial banks that say it is mainly SMEs that are suffering from liquidity problems.

These enterprises are also expected to receive priority in the new phase of the TEPIX II program that according to sources gets under way this Friday with a budget of 800 million euros, offering each company working capital of up to €500,000 with a two-year state subsidy for the interest. This constitutes a new round of financing after the high demand recorded in the first phase of TEPIX II, with applications coming from over 10,000 enterprises.

Kathimerini understands that on the same day the invitation to banks will be published for their participation in the second phase of the Guarantee Fund. It will ask commercial lenders to leverage the €1 billion granted as state collateral that after the participation of banks with their own capital will offer loans of €3.5 billion.

During the first phase of the Guarantee Fund large enterprises secured about €2 billion from its €3.5 billion budget – the remaining €1.5 billion went to SMEs. That balance has now shifted as about €3 billion will go to SMEs this time, whereas €500 million will go to large enterprises.

Bank officials report that big companies have mostly covered their liquidity requirements after the first round of financing, in contrast with SMEs that are of a greater number and have greater funding needs. Experience to date also shows big firms find it more difficult to absorb large loans due to their increased checking procedures.

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