The National Guarantee Fund EAD offers to the commercial banks, the micro-, small-, and medium-sized enterprises two basic guarantee products- investment loan guarantees and working capital loans. Two subgroups are detached in the programs- for existing enterprises and for start- up enterprises.
Basic guarantee programs:
A/investment loan guarantee for micro-, small-, and medium-sized enterprises
This program would follow the priority to facilitate the access to long-term resource for realization of SMEs investment projects. A project purpose should be expansion, development and modernization of enterprises.
B/working capital loan guarantee for micro-, small-, and medium-sized enterprises with priority to pre-export financing
This program would be pointed to start- up enterprises or to existing enterprises, as the major priority and purpose would be export financing.
Parameters of the guarantee programs:
SMEs from different sectors and economic branches may apply for the NGF guarantees, except for the following activities:
-production or sale of ammunition or related services
-casinos or other type of gambling activity
-speculative currency transactions
-real estate transactions
-any activity defined as illegal or as dangerous to the environment or harmful to individual health
-immoral or illegal activities
-activities of religious organizations
To receive a NGF guarantee the enterprises should not have, or had, credit expositions, which were classified in third or fourth classification group as per Regulation No. 9 of the Bulgarian National Bank (more than 90 day overdue payments).
What kind of “flaws” would the NGF guarantees overcome?
-short business history or the lack of it
-the project foresees the construction and acquisition of assets, which could be used as collateral, but in a future moment, NOT NOW
-the standard criteria for solvency assessment, which are used by the banks, not always are able to evaluate the future potential for realization of innovative and high- technological projects; this weak point of banks is usually compensated by additional collateral requirements
-under the present conditions of strict discipline in the operational and export financing, it is searched for a high degree of collateral, which compels the enterprises to “freeze” their assets
What kind of alleviations for SMEs are foreseen by the banks through the NGF guarantees?
-accelerated procedure for considering of loan applications
-the NGF guarantees to be used as a “bridge” collateral and access to loans of enterprises, which are about to build their technological base
-more favourable interest rates on the guaranteed loans
-priority to projects under European or national financing programs, as well as to export- orientated enterprises
-access to bank resource for start- up enterprises and for those with specific projects