On June 22, Postbank in Bulgaria joined the new “Recovery” program to support businesses through guarantees from the Fund of Funds. At a press conference at the Ministry of Finance, the Minister of Economy Kiril Petkov, together with the Minister of Finance Asen Vassilev, representatives of the Fund of Funds, and the Fund’s partner banks, announced the main parameters and advantages of the program. The event was attended by Dimitar Shumarov, Executive Director, Chief Financial Officer, and Member of the Management Board of Postbank.
Minister Petkov explained that the application requirements are for the entrepreneurs that have operated for at least 3 years. The loan will be unsecured, for up to 7 years, and the first 12 months are a grace period. “We are very pleased that despite budget constraints, successful businesses that have the opportunity to enter their recovery period will also have the liquidity to do so. I believe that all small and medium-sized businesses will be able to benefit from the program and have a booming economy. This is a program that will be a partnership between the state and private capital, in the face of banks” added Minister Petkov.
The main advantages of the program, implemented in partnership with banks, are the following:
- Wide access to business loans, without collateral requirement; unsecured loans, except for personal guarantees provided by the owners;
- Obtaining approval and opportunity to disburse in a short time;
- Opportunity to negotiate a 12-month grace period;
- Rescheduling of the payment up to 84 months;
- Ensuring maximum possible clarity and minimizing the administrative burden for the client;
- Opportunity to receive financing in the amount of up to BGN 3 million (approx. 1 533 377 EUR) and up to 70% of the turnover for 2019 or 2020 (depending on which of the years the turnover was higher);
- Accessibility: loans are available in all branches of local partner banks. In this way, the entire territory of the country is covered, where there are those in need of liquidity support and fresh funds.
The program aims to facilitate business access to recovery loans after the phasing out of the Covid-19 pandemic. Entrepreneurs will be able to obtain fresh financial resources, mainly to meet their current liquidity needs, but also for new investments, transformation and growth. The changed conditions of the guarantee provided for the loans to be granted in short terms, with the minimal administrative burden and without the need for material security.
For the successful implementation of the reduced conditions, the government, through the Fund of Funds, proposed to the banks to increase the credit risk coverage by government guarantees provided last year of nearly BGN 158 million (approx. 80 760 280 EUR) under the “Innovation and Competitiveness” Operational Program for 2014 -2020, co-financed by the European Regional Development Fund.
Source: Bank’s press release from June 22, 2021