"The Fund of Funds has more than half a billion levs available under various financing programs that is accessible to Bulgarian businesses," said the Executive Director of the Fund of Funds, Martin Gikov in Darik Radio's Portfolio show.
Gikov pointed out that "the company mainly finances small and medium-sized enterprises" and explained that support is provided through debt and equity instruments, using funds provided by the European Union and the Bulgarian government.
He said that so far the institution has supported more than 2,500 enterprises and went on to give an example of a company which does not have a long enough credit track record or already has incurred debts and so the bank would not lend to it any additional funds; this is where the Fund makes it possible to have access to financing.
"In some cases, it's about proving future cash flow, which can be difficult for younger companies. This is where the Fund comes in, covering much of the risk of financing such projects," said Martin Gikov.
He further explained that the risk of loss coverage was typically 80% and the lending terms were quite favourable and almost interest-free. Thus, when the bank makes a loan guaranteed by the Fund, the interest rate for the borrower will be much lower than what it would pay on a regular corporate loan.
The Executive Director of the Fund of Funds also said that, for entrepreneurs interested in financing, the most convenient and easy way was to seek information about the scheme via their servicing bank. He said that the Fund was currently working with all the leading banks in Bulgaria.
"If it is a start-up, we have five funds that target different stages of a company's development. Until the end of 2023, there is BGN 200 million still available in these private equity funds that are left from the old programming period," he added.
"Given the liquidity problems that are emerging in connection with the tightening of monetary policy in Western countries, this development will be felt in Bulgaria in a few months, and these funds will be very useful," Gikov added.
According to him, Bulgaria has been lucky in that the programmes, which work through the fund, have been launched with some delay, because the funds are currently available, just when a crisis is approaching.
He added that the company also finances mixed municipal-private urban development projects, with nearly BGN 120 million also available in that tract.
Regarding the new programming period, Gikov said that the instruments are expected to amount to more than BGN 2 billion.
