The Sofia Municipal Guarantee Fund Launches a New Instrument in Support of SMEs
The Municipal Guarantee Fund for Small- and Medium-sized Enterprises (MGFSME) is launching a new guarantee instrument in support of the small- and medium-sized businesses (SMEs) in Sofia to limit the negative economic impact caused by the state of emergency because of COVID-19.
The Fund will issue guarantees on the loans of unaffiliated (self-employed) persons, micro-, small-, and medium-sized enterprises (SMEs), whose activity was affected by the epidemic situation, and who are experiencing a shortage of working funds.
The Fund’s guarantees will serve as collateral for the SMEs’ loans. The Fund will pay the bank the amount on the guarantee which the bank hasn’t been able to collect from the debtor.
The maximum amount within which the Fund will issue guarantees under this new financial instrument is 1 000 000 leva. It will cover up to 50% of the amount of the principle of each approved loan on this guarantee scheme, but not over 15 000 leva.
Requirements for Applicants:
– The enterprise should meet the criteria for “a small- or middle-sized enterprise” /SME/ under Article 3 of the SME Act
– The activity of the enterprise should be carried out on the territory of Sofia Municipality
– The activity of the enterprise should fall into the economic sectors that have been affected by the introduced emergency measures on a national and/or regional level
Guarantees are issued on bank loans, aimed at funding the payments for:
– employee remuneration
– social security contributions
– public liabilities
– running costs related to the enterprise’s activity1 (service provider payments, rents, etc)
The guarantees will be valid for up to 24 months from their date of issue. SMEs will not owe fees and commissions.
Sofia Municipality is about to select a Financial Intermediary on a competitive basis (a BNB-licensed commercial bank) who will manage an additional guarantee portfolio of 300 000 leva. The loan of one SME can be guaranteed by both the Sofia Municipal Guarantee Fund and the Financial Intermediary in the amount of up to 80% of the principal.
You can find more information (in Bulgarian) here.
In case you have questions or need a consultation, please contact the Municipal Guarantee Fund’s team: 02/980 9938, email@example.com