State Fund guarantees loans |

Only healthy and coherent enterprises will have access to government guaranteed working capital financed by commercial banks and the Guarantee Fund.

The Fund will operate under the aegis of the Hellenic Development Bank and, according to the announcement of the latter’s CEO, Athina Hatzipetrou, “the working capital will be financed on favorable terms and with reduced guarantees”.

The draft contract with the banks provides that “the Fund’s guarantee does not aim to strengthen the liquidity or the capital adequacy of credit institutions, which should pass on the benefit of the guarantee to companies by reducing the requirements of guarantee and / or reducing the cost of borrowing.

Companies will be able to submit applications until May 26, following the signing of their loan contracts with the banks, so that the Fund can be activated from the beginning of June.

Access to credit will be granted to all categories of businesses, from small and very small to medium and large, whether or not they belong to the Activity Code Numbers (KAD) deemed affected by the pandemic according to the Ministry of finances.

The credits issued will be new credits, because according to the contract model shared with the banks, the refinancing of existing credits is clearly prohibited in this case. The duration of the loans will be five years, possibly including a grace period.

The eligibility criteria will be very strict, respecting the guidelines of the European Commission, in order to exclude any strategic defaults or so-called “zombie” companies. Businesses need to be consistent in their payments, in good financial health, and free from any decisions about unfair government subsidies that have yet to be resolved.

The Guarantee Fund will start with State resources of EUR 1 billion which, with the participation of the banks, will mobilize a total capital of EUR 3.5 billion. At a later stage, public funds could reach € 2 billion, mobilizing funding of € 7 billion in total.

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