Anti-inflationary loan for small and medium-sized enterprises

Date of posting: 2022-01-04

Industrial Development Agency JSC introduces a new product - Anti-inflationary Loan with the guarantee of the European Guarantee Fund. The SME sector will be able to benefit from it.

Anti-inflationary Loan is a new offer, which IDA JSC presents to entrepreneurs. It is a response to the current market conditions. Representatives of Polish industry and other sectors often struggle with rising prices of construction materials, as well as production or transport costs.

This situation generates many expenses on the part of entrepreneurs, including those from the SME sector. The aim of the newly presented loan is to support companies in the current situation and thus to facilitate both their current activities and investments.

- As the Industrial Development Agency we are constantly looking for new development opportunities and market areas in which we can act as an institution providing systemic support. For years we have been helping Polish entrepreneurs from the SME sector through our range of products. The Anti-inflationary Loan is another of them, linked to the current economic situation. Thanks to the EFG guarantee, this product will significantly help many companies in rebuilding the post-crisis economy - said Paweł Kolczyński, Vice-President of Industrial Development Agency JSC

The guarantee of the European Guarantee Fund is one of the key determinants of the product. In the standard process, the borrower must cover a minimum of 120 percent of the loan with tangible collateral. This can be, for example, a mortgage. However, in the case of the Anti-inflationary Loan, the basic collateral (70 percent) will be the guarantee of the EFG. The Anti-inflationary Loan consists of two variants adapted to different needs of entrepreneurs. Firstly, an investment loan for the purpose of completing an ongoing investment (covering a deficit exceeding the investment budget due to, for example, a jump in prices for construction materials).

Secondly, a working capital loan intended for the entrepreneur's current activity.

The exact amount of the loan will be determined individually for each applicant.

It will range from PLN 800,000 to PLN 10 million. The amount will be paid out in tranches or as a one-off payment. The financing period will be up to 48 months for working capital loans and up to 120 months for investment loans. Repayment will take place in equal capital instalments.

- Customers who will use this product will enjoy a number of benefits. These include the relaxation of the requirement to cover the loan materially with collateral or the possibility of a grace period in capital repayment. It is also worth emphasising that in the case of Anti-inflationary Loan, ARP will bear a fee for granting the guarantee - said Konrad Trzonkowski, Managing Director of Industrial Development Agency JSC

Director Trzonkowski also pointed out that - Inflation, also as an effect of abrupt disbursement of accumulated financial surpluses and thus a periodical mismatch between demand and supply structure, causes problems in functioning of enterprises, both in the investment sphere (entities which carry out investments on the basis of estimated costs of, e.g. construction materials and loans taken out) and in the financial sphere (entities which carry out investments on the basis of estimated costs of, e.g. construction materials and loans taken out). This causes problems in functioning of enterprises, both in the investment sphere (entities realizing investments on the basis of estimated costs of, e.g. building materials and taking credits for this purpose, have problems with their realization within a previously established budget) and the one connected with current economic turnover (trade, service or production enterprises realizing contract orders have problems with achieving a positive margin due to a jump growth in prices of goods/materials necessary for production/trade/contract) - it is to these enterprises that the new offer of the Industrial Development Agency is mainly directed.

In order for a company to take advantage of the Anti-inflationary Loan, it must have operated in Poland for more than 12 months. It should also keep full accounts and have annual revenues of at least PLN 4 million, as well as end 2021 with positive net results and EBITDA.

Applications may be submitted by commercial law companies or natural persons conducting business activities, provided that they are not conducting restructuring activities or are not in a situation of bankruptcy. Applicants must also meet the criteria for inclusion in the portfolio guarantee of the Pan-European Guarantee Fund.

Industrial Development Agency JSC finances widely understood enterprise development: investment undertakings, working capital, execution of contracts/orders, implementation of measures increasing effectiveness of business activity and restructuring. It also provides entrepreneurs with Anti-Crisis Shield products. These are: a working capital loan to finance a deficit in working capital, a working capital loan to finance salary payments in the SME sector, a loan to repay leasing instalments, a "MACHINERY" operating lease, a "#REMACHINERY" operating lease, and an operating lease with grace in repayment.

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