Only 4 in 10 firms make the cut for cheap state loans

More than 435,000 enterprises have been rejected from the sixth phase of the cheap state loans program known as the “Deposit To Be Returned,” as they failed the eligibility criteria set by the Finance Ministry.

A number of those enterprises produced a higher turnover in January 2021 than in January 2020, while others experienced a smaller decline than the 20% threshold. Tens of thousands of other firms were rejected due to the newly introduced criterion of excluding any companies with a higher turnover in 2020 than in 2019.

The analysis of expressions of interest in the ongoing sixth phase of the program shows that, out of the 721,396 companies which applied, 60.3% have been rejected and only 286,181 were deemed eligible.

According the ministry, the main reasons for rejection were the following, with a number of companies failing more than one criteria:

– 138,461 enterprises showed an increase in their January 2021 turnover from a year earlier.

– 175,855 companies experienced a turnover decline of less than 20% in January on an annual basis.

– 188,804 businesses had not declared the minimum reference turnover of 200 euros in January 2020.

– 194,950 firms that launched before 2018 showed an increase in turnover last year compared to 2019.

Alternate Finance Minister Thodoros Skylakakis stated on Tuesday that there are weak points in the effort for the fair support of companies and workers, focusing both on the furlough declarations and the state loan applications. He highlighted the fact that almost 195,000 companies asked for state support even though they saw an increase in their turnover last year compared to the year before.

They will be excluded from the program that in this phase will disburse €550 million to eligible recipients, which will receive between €500 and €50,000 each – half of which will not be paid back. The amount of support will depend on each company’s turnover and its decline, deducting the compensation to workers on furlough.

The terms of support require recipients to retain the same number of employees up until at least June, and applications must be submitted by March 16.