Cheap money for companies - who can use it and on what terms?
De minimis guarantees are a form of aid provided by Bank Gospodarki Krajowej (BGK). In a situation where, for various reasons, a company cannot obtain a working capital loan for its current operations, it may apply for a de minimis guarantee. It is a form of collateral for the lender - in the event that the entrepreneur fails to repay the liabilities within the time limit specified in the loan agreement, then the guarantor, i.e. BGK, becomes involved, which repays the debts for the insolvent borrower. Importantly, in such a case, further settlements will be made between the guarantor and the entrepreneur - he will have to return the amount paid out of the guarantee, together with interest. Who is this aid intended for and how much can be gained? What is cheap money? Check below
De minimis guarantee for the SME sector
As a rule, micro, small and medium-sized enterprises can take advantage of the BGK loan guarantee. For:
- a micro-entrepreneur is an entrepreneur employing fewer than 10 employees, whose annual turnover or total annual balance sheet does not exceed EUR 2 million,
- a small entrepreneur is considered to be an entrepreneur employing fewer than 50 employees and whose annual turnover or annual balance sheet total does not exceed EUR 10 million,
- a medium-sized entrepreneur is considered to be an entrepreneur with fewer than 250 employees and with an annual turnover or annual balance sheet total not exceeding EUR 43 million.
However, it is not the case that all companies from the SME sector can take advantage of the de minimis guarantee without any restrictions. A working capital loan with a BGK guarantee will not be granted when:
- the entrepreneur appears in the Bank Register of Unreliable Customers when applying for a loan,
- the owner of the company within 3 months before the date of submitting the loan application, the bank granting the loan terminated the loan agreement because it had overdue debt over 30 days in the amount exceeding PLN 500 or had a loan belonging to the non-performing category at that bank,
- the total exposure under loans granted to this entrepreneur covered by the guarantee or de minimis guarantees will exceed PLN 3.5 million,
- the entrepreneur must return the public aid granted to him previously.
Moreover, entrepreneurs from certain industries, such as the fishery and aquaculture sector, primary production of agricultural products, processing and marketing of agricultural products, cannot apply for the de minimis guarantee.
Moreover, aid may not be granted for the purchase of road transport vehicles granted to companies engaged in gainful activities in the field of road freight transport. In this case, the funds obtained cannot be used to repay leasing installments for the purchase of vehicles intended for road transport.
What does an entrepreneur gain?
A loan with a de minimis guarantee may turn out to be the only salvation for companies that do not have sufficient credit history or funds that may constitute a security for a loan taken. This product can contribute to the growth and development of a business that would otherwise be loss-making instead of profitable.
The guarantee significantly reduces the costs that the business owner has to incur when establishing security for the bank. Moreover, no fee is charged for considering the application for a guarantee.
Importantly, the cost of security in the form of a guarantee is low. The commission rate for the granted guarantee amounts to 0.5% of the guarantee amount per year.
The main advantage of the guarantee is that it allows a business person to obtain a loan in a situation where no bank wants to grant it financing due to the lack of collateral.
The advantage of a de minimis guarantee is also the maximum simplification of procedures when applying for a guarantee, which certainly translates into time savings. All formalities: whether related to obtaining a working capital loan or obtaining a guarantee from BKG, are handled by the entrepreneur in one place - at the bank where the loan is taken. He is only required to submit:
- application for a guarantee with information on state aid,
- a promissory note with a promissory note declaration and a declaration of submission to enforcement and personal data protection (if assistance is provided).
The advantages of such a solution also include the ability to quickly start money from the loan on the account, as well as favorable interest rates on loans covered by the guarantee. De minimis guarantees are also intended to help in the fight against payment gridlocks, which are currently destroying many entrepreneurs. The money borrowed from the bank can be used to pay the company's current liabilities to the tax office, ZUS and contractors.