Financing for more corporations
New funding tools for two categories of enterprises that had been left out of bank financing are in the pipeline, as the government tries to expand its support to the economy in the face of the pandemic. The first category concerns any companies that are currently overindebted, and the second has to do with those that are still at an early stage of development.
The former set are those with a troubled past, some of which are in the problematic companies category. The latter set concerns the opposite – i.e. enterprises that due to their early stage of corporate life do not have sufficient data to allow them access to bank loans so that they can grow, risking the premature failure of their efforts.
The common denominator of the two categories is that they are considered to be high-risk corporations, and have been left without credit, in spite of the significant cash flow channeled into the economy through banks for the first time in years, and the two main financing instruments, the Entrepreneurship Fund II and the Guarantee Fund.
The question at the Development Ministry is what criteria should be used to select the recipients of this new support.