The Covid-19 outbreak is posing a challenge to growing numbers of companies for whom the general shut-down of the economy is resulting in liquidity issues.

In response, Bank Gospodarstwa Krajowego, in cooperation with the Polish government and with the banking sector, is announcing instruments intended to afford additional liquidity for businesses. These include, in particular, Liquidity Guarantees Fund guarantees for medium-sized and large enterprises up to PLN 200,000,000, de minimis guarantees for small and medium-sized enterprises up to PLN 3,500,000, and support programmes relying on EU funds.

Set out below, please find an overview of these instruments. For any Clients interested in tapping the BGK support, GESSEL stands ready to provide tailor-made analysis.

Liquidity Guarantees Fund guarantees for medium-sized and large enterprises

What, exactly, might this be ?  The Liquidity Guarantees Fund will underwrite new or renewed current / revolving credit facilities and/or investment credit facilities of up to PLN 250,000,000. Such guarantees may be extended for up to 27 months. BGK is promising to have these guarantees up and running by mid-April 2020.

Value of the aid. The liquidity guarantees may secure up to 80% of the credit facility’s value, and BGK’s total guarantee commitment to any given enterprise will be between PLN 3,500,000 and PLN 200,000,000.

Eligibility and prerequisites. The liquidity guarantees are addressed to medium-sized and large enterprises which do not have any tax or social insurance arrears or arrears vis a vis the lending bank.

The benefits:

  • A Liquidity Guarantees Fund guarantee should result in a more flexible, open approach to analysing the creditworthiness of companies, which will be performed as at the end of January 2020;
  • Lower borrowing costs;
  • The bank may demand additional collateral (e.g. a pledge or a mortgage) only on the part of the credit facility not covered by the guarantee.

De minimis guarantees for micro-enterprises and small and medium-sized enterprises

De minimis guarantees are addressed to enterprises with up to 250 employees:

  • For current / revolving credit facilities – for a period of up to 27 months (for new credit facilities or for extensions of existing credit facilities already underwritten by the Liquidity Guarantees Fund over the period through 31 December 2020, in which case the guarantee may cover up to 39 months) and
  • For investment credit facilities – for a period of up to 99 months.

Value of the aid. Over the period through 31 December 2020, the liquidity guarantee may secure up to 80% of the credit facility’s value, and BGK’s total guarantee commitment to any given enterprise will not exceed PLN 3,500,000.

Eligibility and prerequisites. The de minimis guarantees are addressed to small and medium-sized enterprises (not belonging to certain excluded sectors) which have not exhausted the de minimis aid limits and which do not have any tax or social insurance arrears as at 1 February 2020.

The benefits:

  • Easier access to loans for entities which lack a sufficiently long credit history or which, for other reasons, have difficulty borrowing money subject to the general rules;
  • The bank may demand additional collateral (e.g. a pledge or a mortgage) only on the part of the credit facility not covered by the de minimis guarantee (the de minimis guarantee as such shall be secured by the borrowing enterprise with an in blanco promissory note or by a promissory note guarantee).

Support from European Union aid

The available instruments. SMEs may finance technological investments with loans offered by commercial lenders; the support would be comprised in a “technological bonus” from BGK covering repayment of such a loan up to 70%.

Value of the aid. The “technological bonus” is capped at PLN 6,000,000.

Eligibility and prerequisites. These BGK grants are addressed to small and medium-sized enterprises (not belonging to certain excluded sectors) who bring to the table own funds covering at least 25% of the aggregate project value.

  • “Technological bonus” constituting up to PLN 6,000,000 towards repayment of a loan drawn from a bank;
  • Application deadline extended through 24 June 2020;
  • Deadlines for presenting the requisite documentation and for executing the credit agreement likewise extended.

 

Contact:

 

 

Małgorzata Badowska

partner

m.badowska@gessel.pl

Małgorzata Badowska

 

 

Michał Bochowicz

managing associate

m.bochowicz@gessel.pl

 

 

Weronika Zdeb

senior associate

w.zdeb@gessel.pl