1. Companies of what size will be eligible for liquidity guarantees ?

Bank Gospodarstwa Krajowego is rolling out Liquidity Guarantee Fund guarantees for medium-sized and large enterprises, as defined in the Polish entrepreneurs laws. And thus, a medium-sized enterprise is one which, in at least one of the past two financial years, fulfilled both of the following conditions: 1) maintained an average annual employee headcount of between 50 and 249 and 2) achieved annual net sales turnover between EUR 10 mln and EUR 50 mln and/or balance sheet assets as at the end of the year between EUR 10 and EUR 43 mln. A large enterprise, meanwhile, is one which exceeds these figures.

  1. Will a company which posted a loss for 2019 and now running a profit qualify for liquidity guarantees ?

Liquidity guarantees will be available to companies which were not in a difficult situation as at 31 December 2019 and which did not have arrears in social insurance contributions, taxes, or bank loan repayments (debts in excess of PLN 3,000) as at 1 February 2020. In this connection, the anti-crisis shield legislation uses the term “difficult situation” (trudna sytuacja) without offering an exact definition; all things considered, one would surmise that the object of this qualification is to avoid a scenario where the guarantees are used to prop up businesses which were struggling before the Covid-19 pandemic, rather than generally healthy ones now caught in the doldrums. It will be up to the banks offering BGK-backed guarantees to flesh out the concept of “difficult situation” in the credit documentation. In our opinion, a “difficult situation” would generally be deemed to arise in the case of businesses which are excessively indebted or outright insolvent, and especially if the statutory criteria for bankruptcy are met.

  1. How can a guaranteed credit facility be used ?

The anti-crisis shield legislation provides that BGK may provide guarantees under the Liquidity Guarantee Fund as security for credit facilities earmarked for ensuring financial liquidity. In general, then, an enterprise drawing on such credit would be expected to apply it towards timely clearing of liabilities arising in connection with its business operations, such as remunerations for own employees as well as for subcontractors, procurement of goods and services needed for the business, or real properties used by the business. We would assume that the actual credit facility documentation may lay down more detailed provisions as to how, exactly, the funds thus extended may be used. Importantly, the guarantees may be extended not only for new credit facilities, but also for existing ones, including revolving credit facilities and overdraft facilities.


The above is extracted from “Tarcza antykryzysowa dla firm i pracowników w 129 pytaniach i odpowiedziach”, a Q&A about the Covid-19 anti-crisis legislation published in an addition to Dziennik Gazeta Prawna - Tygodnik Gazeta Prawna on 17 April 2020.