FINANCE

Credit for smaller enterprises

Hellenic Development Bank offering funding instruments in cooperation with lenders

credit-for-smaller-enterprises

The Hellenic Development Bank (HDB) has secured working capital loans of up to 250,000 euros each as well as investment-minded loans of up to €1.5 million each for small enterprises, using two financing instruments that are being implemented in cooperation with commercial lenders.

Those funding tools are the Guarantee Fund for small and micro enterprises, and the Second Entrepreneurship Fund (TEPIX II), which concerns businesses with an annual turnover up to €50 million, offering working capital credit guaranteed by the HDB or low-interest loans for financing investment plans.

The two programs command funds of €700 million between them and operate as a secure borrowing source until the European Union-funded Recovery and Resilience Fund (RRF), known as Greece 2.0, is activated, and until the investment incentives law starts applying to any enterprises needing liquidity or wishing to proceed with their investment without getting involved in the RRF approval procedure.

The HDB lending programs have in the last couple of years provided vital support for company liquidity, especially since the outbreak of the pandemic. According to HDB Chairwoman and Chief Executive Athina Hatzipetrou, “the bank will continue in the coming years acting as a fintech corporation that provides enterprises with new targeted instruments promoting entrepreneurship and rewarding innovation.”

In this context, the HDB is planning new tools for microcredit, as well as development programs to subsidize the necessary capital for the creation of new products and production methods. It already boasts a full range of financing instruments for tackling the effects of the pandemic and bankrolling investment projects in its arsenal.

They include TEPIX II, which offers loans on favorable terms for investments to enterprises, as 40% of each loan is interest-free being subsidized by the HDB. Loans may range from €25,000 to €1.5 million, while the repayment period is between five and 10 years, with a grace period of up to 36 months.