ECONOMY

Small firms to get loan rate subsidy

Small enterprises employing up to 20 staff members and with an annual turnover of up to 10 million euros will receive subsidies of 4 percent off their borrowing rates, Development Minister Dimitris Sioufas announced yesterday. Sioufas said that according to 2003 data for European Central Bank, the average borrowing cost for Greek enterprises, particularly as regards small enterprises, is significantly higher than in the rest of the European Union – more than 6 percent against about 4 percent. Because of this, only 20 percent of Greek small firms have developed stable relationships with banks, when the EU average is about double that. The borrowing rate subsidy program concerns long-term investment loans in all sectors except farming, fisheries and transport. It also includes leasing contracts with buyout clauses for equipment. The loans or leasing contracts to be subsidized must be between 10,000 and 400,000 euros. The Development Ministry estimates that the program will benefit about 2,500 financially viable or new innovative firms.