The The Innovation Guarantee Fund is the the first financial instrument aimed at supporting innovative start-ups and existing Micro, Small and Medium Enterprises (SMEs) of any legal form, promoting research and innovation and which document their innovative character through their Business Plan and relevant supporting documents.

The financial instrument supports the competitiveness of innovative SMEs, combines for the first time the provision of a loan guarantee and a grant of 20% of the borrowed capital. Investment loans & working capital are offered through the banks participating in the program.

Who is affected by the Innovation Guarantee Fund

The Innovation Guarantee Fund concerns existing and newly established micro, small and medium-sized enterprises (SMEs) (SME definition (Annex I of EP 651/2014) which:

• meet at least one (1) of the Innovation Eligibility Criteria required to participate in the programme
• are considered creditworthy in accordance with the applicable credit policy and internal procedures of credit institutions
• are bank-aware (have a debt of < 90 days) on the date of application

What is the economic advantage for the business from the Innovation Guarantee Fund

Given the guarantee from the Innovation Guarantee Fund, the beneficiary company enjoys:

• lower interest rate on the loan
• smaller (or no) collateral
• if the conditions for achieving innovation and ESG criteria are met, then the company also receives a grant of up to 20% in the form of an impairment of the loan capital

Budget

total Credit institutions will make available EUR 140.7 million. euros to support innovative businesses.

Maximum loan amount

The maximum loan amount is 400,000 euros with a minimum of 25,000 euros. The following are not allowed:

• Refinancing/repaying existing debt or credit lines
• The financing of a dividend payment program or the purchase of shares

Maximum duration of loan – guarantee

The duration of the loan is set up to 10 years. Any grace period from 1 to 3 years is included.

Guarantee rate of the Hellenic Development Bank for the Innovation Guarantee Fund

The guarantee rate is set at 80% per loan.

Advantage of the warranty

The Hellenic Development Bank guarantees credit institutions up to 80% of the disbursed capital. As a result, credit institutions granted loans on more favourable terms:

• either by lowering the interest rate
• or by reducing any collateral requested from the borrower

What does the additional unique advantage of the grant up to 20% mean?

Eligible companies can apply for a grant of 15% to 20% of the loan amount when they have successfully completed their investment, based on a review of the achievement of specific innovation criteria for 15% and ESG criteria (Environmental, Social and Corporate Governance) for the additional 5%. Receiving the grant will correspondingly reduce the balance of their borrowed capital to be repaid.

Precise criteria for the approval of the grant of up to 20% from the Innovation Guarantee Fund

In order to receive the grant, The achievement of the following criteria should have been achieved within thirty-six (36 months) from the first disbursement of the Loan, while the Final Recipient may apply to the credit institution for a check to certify the fulfilment of the required criteria, over a period of time between twelve (12) to forty-two (42) months from the first disbursement of the loan and only if the amount of the loan indicated in the relevant Final Recipient Agreement has been fully disbursed. The credit institution should send the relevant Grant Request up to forty-four (44) months after the first disbursement of the Loan. To receive 15% of the total disbursed Loan as a grant at least one of the following two innovation criteria should have been achieved: Research and innovation expenditure should constitute at least 20% of total operating costs up to thirty-six (36) months from the 1st disbursement of the loan. b) For start-ups with a duration of operation of up to three (3) years at the time of conclusion of the loan agreement with the credit institution, the total expenditure on research and innovation incurred up to thirty-six (36) months from the 1st disbursement must be equal to or exceed 20% of the amount of funding, in line with the latest certified financial statements. The fulfillment will be proved by the relevant documentation (combined, invoices, E3, Profit and Loss Statement and certificate of the company's accountant or auditor). If one of the above conditions is met, leading to the grant of 15% as above, the Final Recipient may receive an additional 5% of the total disbursed loan as a Grant with the simultaneous observance of at least three criteria in at least two of the three categories of implementation of ESG (Environmental / Social / Governance) practices:

A. Category of Environmental Criteria

1) Reduction of average annual energy consumption with documentation by at least 20% (EXANTE control – EXPOST)2) Increase or maintain a percentage of use of renewable energy sources of at least 20% in relation to the use of total energy consumption sources (EXANTE control)

B. Category of Social Criteria

1) Existence or Increase of the percentage of women participating in positions of responsibility (EXANTE -EXPOST control at 10% of the upper salary scale of the company)2)Increase in the average annual number of employees (EXANTE -EXPOST control)3)Increase in the average annual expenditure on staff training (EXANTE -EXPOST control)4) Existence of a policy and methodology for measuring Customer satisfaction

C. Category of Governance criteria

1) Existence of a corporate governance policy2) Existence of a data and/or personal data security policy In case the fulfillment of the above criteria cannot be confirmed at the end of the period, a maximum of thirty-six (36) months from the 1st disbursement, as well as in case the The final recipient does not submit a grant request within the stipulated deadline, a grant request is sent by the credit institution with a zero grant amount, the amount of the grant is not paid, and the debt continues to be repaid by the Final Recipient, maintaining the benefit of the EBA Guarantee on the loan until its maturity

Maximum percentage of collateral from the company (Beneficiary)

• For loan amounts from 25,000 euros to 50,000 euros, only contractual collateral is received.
• For loan amounts above EUR 50,000, additional cover may be received in addition to the guarantee from the Innovation Guarantee Fund in addition to the guarantee from the Innovation Guarantee Fund, but only to the extent justified given the Guarantee. In case of receiving collateral, these will not exceed 20% of the loan, while in any case the underwriting of a permanent and sole residence is prohibited.

Warranty fee

There is no warranty fee.

Other expences

There are fixed costs for the evaluation of loan requests and the evaluation of the coverage of grant criteria, which will not exceed a total of 0.5% of the funding amount and up to the amount of 1,200 euros and depend on the pricing policy of each credit institution participating in the Fund.

Additional free service along with the loan

HDB provides free of charge to all SMEs that will receive the loan on entering the international digital platform "InnoAgora". InnoAgora is an international online platform that enables three different categories of participants (companies, investors and support mechanisms)to come together and enter into investment agreements and commercial partnerships with a strong outward-looking character. For more about InnoAgora click here.

Partner Banks with the Innovation Guarantee Fund

• Piraeus Bank
• Alpha Bank
• Eurobank
• Attica Bank
• Pancretan
• Optima Bank
• Cooperative Bank of Chania
• Cooperative Bank of Epirus
• Cooperative Bank of Thessaly

Submission of requests

The expression of interest of the companies is made through the State Aid Information System (PASKE), at the following address: www.ependyseis.gr , indicating the Cooperation Bank from which it wishes to receive funding.