As of the end of September 2022, 1,300 small and medium-sized enterprises across the country have benefited from preferential loans to overcome the consequences of the COVID-19 pandemic. In total, businesses have received over BGN 465 million in bank financing, having negotiated loans valued at approximately BGN 540 million. The funds have been made available for meeting the companies’ liquidity and investment needs. The loans are made under the Recovery Programme by seven commercial banks. Loan performance is guaranteed by over BGN 250 million from the Fund of Funds, whose principal is the Ministry of Innovation and Growth. Through the implementation of the financial instrument, virtually every lev of public resources is leveraged into BGN 2.5 of support for businesses.
The Recovery Programme is one of the main national instruments for supporting small and medium-sized businesses, with the average amount of loans granted exceeding BGN 370 thousand. So far, more than 2/3 of the funds have been allocated to the regions outside the capital one. Over 250 types of business activities have been financed under the programme. Companies from lines of business most affected by COVID-19, such as cargo transport, retail or catering, have been supported. Further details on the implementation of the first phase of the Recovery Programme, which ended in June 2022, including key statistics, can be found here.
It is expected that by the end of the year Bulgarian companies will be able to benefit from access to at least another BGN 120 million BGN. Three full annual financial statements, with an accounting profit for at least one of them are required. The programme allows loans to reach up to BGN 3 million and there is no pledge of collateral is required other than for a personal guarantee from the owners. The final recipients can negotiate a grace period of up to 12 months for the first instalment and a repayment period of up to 7 years.
80% of the risk of each individual loan under the programme is borne by the Fund of Funds, with resources provided by the Operational Programme Innovation and Competitiveness 2014-2020 (OPIC), co-financed by the European Regional Development Fund. The Recovery Programme was extended mid-year, with the provision of BGN 96 million from OPIC under REACT-EU. With this additional amount of resources, the total support to business is expected to reach almost BGN 700 million. The programme continues to effectively support the financing of SMEs across the country.
More information about the portfolio guarantee and the banks providing the loans can be found here.
* The Recovery Programme covers all eligible sectors of the economy, in line with the Operational Programme Innovation and Competitiveness 2014 -2020.
