Great breath in the market by channeling working capital to small and mediumbut also cheaper investment loans is expected to give, according to business factors, the new TEPIX 3 fund, the basic parameters of which were presented last week by the Ministry of Finance.

This is a new financial instrument which comes at a time when small and medium-sized enterprises are thirsty for working capital, which remains difficult to find, while it provides a way out with cheaper financing of their investment projects.

The new Entrepreneurship Fund is financed by the NSRF with 500 million euros, while with the participation of the banks’ funds, the total amount of credits will reach 2.2 billion euros.

Working Capital

Regarding working capital, which can range from 10,000 euros to 500,000 euros per business, there are two options:

a) To be financed with 40% of the capital interest-free and the remaining 60% to be made available through the banks with their current interest rate reduced by at least 25 basis points. For the first two years of the loan, there is an additional possibility of subsidizing the interest rate (3 points) from the Fund. It is noted that the duration of the loan for working capital is expected to be from 2 to 5 years with a twelve-month grace period.

b) To choose the solution of the guarantee of 70% of the loan for working capital from the Fund on the condition that the company will contribute with guarantees for the remaining 30%. In this case, the amount of the loan can reach up to 500,000 euros if it is a business with more than 5 years of operation and up to 200,000 euros for newly established businesses. In particular, for newly established companies, the amount of guarantees offered by the Fund reaches 80%, while for an amount of working capital up to 50,000 euros, all guarantees are covered, which is a great convenience, especially for small businesses that do not have access to bank loans. And in this case, the duration of the loans amounts to 2 to 5 years with a twelve-month grace period.

Investment Loans

Investment loans range from 10,000 euros to 10 million euros with a 70-80% guarantee from the Fund. The loans offered have a reduced interest rate of up to 70% for the first two years. 40% of the loan amount is interest-free and the remaining 60% is provided with a 3% interest rate subsidy for two years.