Following the government initiatives and in the context of the planning of the Ministry of Development and Investments for immediate and substantial support and enhancement of the financial liquidity of the businesses affected by the Covid-19 pandemic, the Hellenic Development Bank starts to be available from today, Tuesday 28 April 2020, New working capital lending product with full interest rate subsidy.

With extremely short procedures, banks will proceed with the granting of working capital loans to businesses that have been suspended or restricted due to the Covid-19 pandemic and which have one of the eligible SMRs announced by the Ministry of Finance. The interest rate on these loans will be subsidised at 100% for the first two years from the resources of the TEPIX II Entrepreneurship Fund . A basic condition for the interest subsidy must be that jobs are maintained for at least the first two years of the duration of the loan subsidy.

Target of a working capital loan program

The aim of the program is the immediate, long-term and substantial support of the financial liquidity of companies affected by the pandemic. For this purpose, the cooperating banks, which with extremely short procedures will grant, after evaluation, working capital loans to businesses that have suffered suspension or restriction of their operation due to the CoViD-19 pandemic.

It is noted that the interest rate on these loans is subsidized by 100% for the first two years from the resources of the Entrepreneurship Fund TEPIX II. The main criterion for receiving the interest subsidy is the preservation of jobs during these two years.

Conditions for download and retention

• The enterprise must maintain for the entire two years of the interest rate subsidy at least the same number of employees as it employed on 19.03.2020 based on the data of the ERGANI system .
• The control of the retention by the company of the same number of employees that it employed on 19.03.2020 based on the data of the ERGANI system for two years, will be carried out by the EBA on January 31 for the years 2021 and 2022 or on the next working day, electronically through the ERGANI System and the Financial Intermediaries will be informed accordingly.
• A prerequisite for receiving the amount of subsidized interest is that the business, at the time of disbursement of the subsidized interest as defined in the loan agreement, does not show any overdue debts from the specific financing.

Working capital loan amount

The amount of working capital loans is as follows:

• Up to 50% of the turnover of the business as reflected in E3 or in the VAT return or in the periodic VAT returns of the financial year preceding the date of application or
• Up to 50% of current year's orders.

In the case of start-ups, it is financed at a subsidised rate, up to 50% of the current year's orders or 80% of the purchases on credit. In case the above figures are not distinct, the loan may not exceed 100% of the own funds.

Loan Duration and Grace Period

The duration of working capital loans is set from 24 to 60 months from the disbursement (one-off or first instalment) of the loan.

There is a possibility of granting a grace period of 6 to 12 months.

During the grace period, only interest shall be paid.

Interest rate

The interest rate for the funds of the loan contributed by each Bank, to the financing of each enterprise, is determined by the Bank in accordance with its current policy and the general terms of the Action.

• The interest rate may not exceed 8% for the period during which it is subsidized (first two years). For this period the interest rate on the loan will remain fixed.
• The interest rate of each loan for the first two years will be subsidized by 100% from the resources of tepix II.
• Any contribution of N is not subsidized. Regulation (EEC) No 128/75 and any interest for late payment.
• At the expiration of two years, interest is paid by the enterprise.

Applications for the new lending product to banks start today, through the State Aid Information System.

In the request, the interested company must choose the Bank from which it wishes to borrow. The Bank will confirm the SMR on the basis of the information provided by the company and thus the correctness of the eligibility.